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The  Story 


I 

of  the 


Trust    Companies 


By 

Edward  Ten  Broeck  Ferine 


Illustrated 


G.  P.  Putnam's  Sons 

New  York  and  London 

^be  Ifcnlcfierbocftec  press 

1916 


/^ 


Copyright,   1916 

BY 

EDWARD    TEX    BROECK    FERINE 


"Cbe  "Rnlchcrbocfcer  press,  •ftcw  IBorft 


UHivmnY  OF  SOUTHERN  cAL:roRr:!A  librarb 


MY   FRIEND   OF   MANY   YEARS 

JAMES  HERBERT  CASE 


FOREWORD 

Trust  companies  are  a  modern  development. 
Their  literature,  as  revealed  in  the  bibliography 
at  the  close  of  this  volume,  has  been  of  limited 
scope,  although  statistics  have  now  been  avail- 
able for  some  years  and  the  legal  aspects  and 
technical  methods  of  operating  the  companies 
have  had  bestowed  upon  them  a  considerable 
degree  of  attention.  The  present  book  is 
intended,  with  an  avoidance  of  technicalities, 
to  sketch  the  beginnings  and  advances  of  the 
older  companies,  and  to  bring  the  individual 
narratives  of  a  number  of  the  largest  institutions 
down  to  191 6, — a  point  within  one  hundred 
years  of  the  original  announcement  by  an 
American  corporation  of  an  intention  to  trans- 
act a  trust  business. 

In  most  localities  there  are  well  defined 
differences  between  banks  and  trust  com- 
panies. The  former  serve  their  clients  as 
depositories  and  extend   credit  in  proportion 


vi  Foreword 

to  the  accounts  thus  handled,  the  general  rule 
being  not  to  pay  interest  on  deposits  belonging 
to  those  who  are  borrowers.  Many  trust 
companies,  particularly  in  the  smaller  com- 
munities, follow  the  same  practice,  but  their 
usual  function  is  as  the  holders  of  moneys  not 
actively  employed  for  commercial  purposes; 
on  these  sums  interest  is  paid;  when  they 
are  withdrawn  it  is  frequently  for  permanent 
investment.  Their  so-called  trust  powers  com- 
prise the  registering  and  transferring  of  stock, 
the  certification  of  corporate  bonds,  appoint- 
ment to  act  as  executor,  administrator,  trustee, 
committee,  agent,  and  in  almost  every  ca- 
pacity in  which  individuals  might  act  with  the 
more  limited  ability  of  individuals. 

One  author  has  said  of  the  trust  companies 
that  they  are  the  department  stores  of  finance. 
It  is  an  apt  metaphor,  for  the  service  they  ren- 
der in  these  times,  and  the  skill  and  common 
sense  demanded  of  their  managements  are  exact- 
ing to  a  degree  greater  than  in  almost  any  other 
line  of  business  activity.  Their  history  de- 
serves to  be  written,  and  although  it  has  been 
necessary    to   omit    references    to   many   hun- 


Foreword  vii 

dreds  of  institutions  of  less  size  than  those  whose 
names  have  been  woven  into  the  following  text,  it 
is,  nevertheless,  due  them  to  say  that  each  has 
its  honorable  part  in  a  line  of  endeavor  in  which 
the  test  is  not  merely  dollars  piled  up,  but  a 
good  name. 

The  author  owes  much  to  the  other  writers 
mentioned  herein.  Thanks  are  also  due  for 
the  generous  help  given  by  trust  company 
officials  everyivhere  who  have  aided  in  gather- 
ing and  assembling  specific  facts,  figures,  and 
illustrations.  Of  the  last  named,  those  which 
serve  as  a  reminder  of  the  old  days  when  trust 
companies  put  out  their  own  circulating  notes 
have  been  furnished  from  a  splendid  collection 
of  paper  money  made  by  Mr.  David  Proskey 
of  the  New  York  Coin  &  Stamp  Company. 
This  is  true  of  each  of  the  facsimile  notes, 
except  the  little  Fairfield  Loan  &  Trust  Com- 
pany's half-dollar  of  scrip,  which  has  been 
kindly  loaned  by  Mr.  Wayte  Raymond  of  the 
United  States  Coin  Company  of  New  York. 

E.  T.  P. 

New  York,  September  30,  19 16. 


CONTENTS 


PAGB 
FOREWORD  V 

CHAPTER   I 

Events  prior  to  and  during  1812;  An  address  from  the 
President  and  Trustees,  Pennsylvania  Company 
for  Insurances  on  Lives  and  Granting  Annuities; 
Farmers  Fire  Insurance  «S:  Loan  Company,  the 
first  incorporation  with  trust  powers         .        .         1-17 

CHAPTER   II 

Events  following  1822;  New  York  Life  Insurance  & 
Trust  Company,  the  first  incorporation  with 
"trust"  in  title;  Its  organization;  Early  reports     1 8-3 1 

CHAPTER  III 

Banking  expansion;  Warnings  in  the  public  prints; 
Re-incorporation  of  Farmers' ;  Re-incorporation  of 
Pennsylvania  Company ;  Incorporation  of  Girard .     32-52 

CHAPTER   IV 

Bank  statistics  of  1835;  Ohio  Life  Insurance  &  Trust; 
Southern  Life  Insurance  &  Trust;  Fairfield,  Con- 
necticut Loan  &  Trust  Company;  Panic  of  1837; 
First  convention  of  American  bankers     .  .         53"65 

is 


Contents 

CHAPTER   V 


PAGB 


New  York  State  Free  Banking  Act  and  its  consequen- 
ces; New  York  State  trust  companies  incorporated 
under  Free  Banking  Act;  Invasion  of  Wall  Street  by- 
out-of-town  concerns;  "The  Wall  Street  Chorus"; 
Supervision  by  Comptroller  at  Albany;  Office  of 
Superintendent  of  Banks  established  at  Albany; 
Buffalo  and  Philadelphia  trust  companies;  Early 
litigation;  Magazine  comment  of  1854  .       .       .       66-82 

CHAPTER  VI 

Incorporation  of  United  States  Trust  of  New  York, 
1853;  Test  of  constitutionality  of  its  charter; 
Early  reports;  An  auction  sale  of  property  held 
under  a  receivership;  American  Bible  Society 
Trusteeship         .  .         .  ...         83-94 

CHAPTER  VII 

Failure  of  Ohio  Life  Insurance  &  Trust;  Panic  of  1857; 
Incorporation  of  Merchants'  Loan  &  Trust  of 
Chicago     ....  .  .  .    95-106 

CHAPTER  VIII 

Six  pioneers  described  since  1865:  Farmers';  New  York 
Life;  Pennsylvania  Company;  Girard;  United  States 
Trust;  Merchants'  of  Chicago;  Some  functions  and 
illustrative  appointments.       ....  107-121 

CHAPTER   IX 

Union  of  New  York;  Provident  Life  &  Trust  of  Phila- 
delphia; Fidelity  of  Philadelphia;  Brooklyn  Trust; 
Rhode  Island  Hospital  Trust;  A  Bankers  Directory 
of  1868      122-138 


Contents  xi 


CHAPTER   X 


PAGB 


Citizens  Savings  &  Trust  of  Cleveland;  New  England 
of  Boston;  Philadelphia  Trust;  Union  of  Chicago; 
Illinois  Trust  &  Savings;  Panic  of  1873;  Boston 
Safe  Deposit  &  Trust;  Central  of  New  York    .       139-152 

CHAPTER  XI 

Supervisory  legislation;  Lack  of  early  figures;  Report  by- 
New  York  State  Superintendent  of  Banks;  First 
Tabulation  by  Comptroller  of  the  Currency;  Real 
Estate  Loan  and  Trust  of  Washington,  D.  C; 
Inactivity  from  1876  to  1880  .         ,         .       153-165 

CHAPTER  XII 

Metropolitan  of  New  York;  Title  Guarantee  &  Trust 
of  New  York;  Land  Title  &  Trust  of  Philadelphia; 
Lawyers  Title  Insurance  of  New  York;  Fidelity  of 
Newark;  Industrial  of  Providence;  Franklin  of 
Brooklyn  ......       166-182 

CHAPTER  XIII 

New  York  Trust;  Union  of  Pittsburgh;  Security  Trust 
&  Savings  of  Los  Angeles;  Continental  and  Com- 
mercial of  Chicago;  Old  Colony  of  Boston;  Alissis- 
sippi  Valley  of  St.  Louis       ....        183-194 

CHAPTER  XIV 

Guaranty  of  New  York;  Contrast  of  1896  and  1916 
aggregates;  Panic  of  1893;  United  States  ]\Iort- 
gage  &  Trust  of  New  York;  Union  of  San  Francisco; 
Cleveland  Trust;  Canal  Bank  &  Trust  of  New 
Orleans;  Mercantile  of  St,  Louis;  Commercial  of 
Jersey  City 195-214 


xii  Contents 


CHAPTER  XV 


PAGE 


Growth  In  the  new  century;  "Trust  Companies" — 
Magazine;  Equitable  of  New  York;  Empire  of  New 
York;  Central  of  Chicago;  First  Trust  and  Savings 
of  Chicago;  Bankers  of  New  York;  Baltimore 
and  San  Francisco  fires        ....       215-230 


CHAPTER  XVI 

Panic  of  1907;  Re-opening  of  Knickerbocker  Trust; 
Columbia  Trust  of  New  York;  Astor  Trust  of 
New  York;  Foreign  companies      .  .  .       231-241 


CHAPTER  XVII 

Savings  Union  Bank  &  Trust  of  San  Francisco;  Los 
Angeles  Trust  &  Savings;  German  American 
Trust  &  Savings  of  Los  Angeles;  Commerce  of 
Kansas  City;  Plibernia  Bank  &  Trust  of  New 
Orleans;  Northern  of  Chicago;  Harris  Trust  of 
Chicago;  Chicago  Title  &  Trust;  Hibernian  Bank- 
ing Association  of  Chicago;  Guardian  Savings  & 
Trust  of  Cleveland;  Union  Savings  Bank  &  Trust 
of  Cincinnati;  Fidelity  Title  &  Trust  of  Pittsburgh; 
Colonial  of  Pittsburgh;  Mercantile  Trust  &  Deposit 
of  Baltimore;  Commercial  of  Philadelphia;  Roches- 
ter Trust  &  Safe  Deposit;  Security  of  Rochester; 
Trust  &  Safe  Deposit  of  Onondaga,  Syracuse; 
Hudson  Trust  of  Hoboken;  Trust  Company  of 
New  Jersey,  Hoboken;  Broadway  Trust  of  New 
York;  Peoples  of  Brooklyn;  Kings  County  of 
Brooklyn;  American  of  Boston;  State  Street  of 
Boston;  Commonwealth  of  Boston         .         .       242-262 


Contents  xiii 

CHAPTER  XVIII 


PAGB 


Trust  Company  Section,  American  Bankers  Associ- 
ation, Origin;  Annual  meetings;  Recent  accomplish- 
ments; Social  features;  OfiScial  arrangements  .      263-275 

CHAPTER  XIX 

Personnel,  men  In  public  life;  Merchants  and  manu- 
facturers; Professional  men;  Private  bankers  and 
capitalists;  Corporate  bankers       .         .         .      276-287 

CHAPTER  XX 

Suspensions  and  failures;  The  reserve  question  in 
New  York;  Admission  of  trust  companies  to  New 
York  Clearing  House ;  Statistics  of  recent  years    .  288-299 

APPENDIX  "A" 

Aggregate  resources  and  liabilities  of  seventy 
Leading  Companies,  shown  comparatively  for  1906 
andi9i6 300-307 

APPENDIX  "B" 

Bibliography 308-312 

Index 313 


ILLUSTRATIONS 

PAGE 

Corner  of  Wall  and  7/1111301  Streets,  1800. 
No.  34  (old  number)  in  center,  first  home 
of  The  Farmers'  Loan  and  Trust  Com- 
pany, the  oldest  loan  and  trust  institution 
in  America    ....      Frontispiece 

Handwritten  Index  of  "Political  Pamphlets." 
A  collection  made  by  Thomas  Jefferson 
about  1 8 15,  containing  (No.  4)  a  reference 
to  the  first  literature  issued  by  The 
Pennsylvania  Company  for  Insurances 
on  Lives  and  Granting  Annuities     .  .         8 

The  earliest  announcement  of  a  company 
with  power  "to  execute  trusts"  in  a  cor- 
porate capacity.  From  the  New  York 
Evening  Post,  Avigvist  6,  1^22  ...        14 

A    circular    issued    about    1836,    describing 

Benefits  of  Life  Insurance        ...       46 

An  interest  bearing  note  for  50  cents.     Issued 

in  Connecticut,  1837       ....       60 

A  one  dollar  bill  of  a  New  York  trust  com- 
pany. Issued  in  1841,  under  the  "Free 
Banking"  Act 68 

XV 


xvi  Illustrations 


PACB 


Stock  certificate  issued  in  Mobile  under  a 

charter  dated  early  in  1836       ...        72 

Specimen  of  unissued  circulation  as  originally 
held  in  the  custody  of  the  Comptroller  of 
New  York  State     .....       78 

The  first  home  of  The  Merchants'  Loan  & 
Trust  Company.  Corner  of  La  Salle  and 
South  Water  Streets,  Chicago  .  .104 

The  New  York  Stock  Exchange,  and  office  of 
the  New  York  Guaranty  &  Indemnity 
Company,  Broad  Street,  1866  .  .108 

No.  408  Chestnut  Street,  Philadelphia. 
Office  of  the  Girard  Trust  Company,  1850 
to  1872.  From  original  in  Historical 
Society  of  Pennsylvania.  .  .  .114 

Broadway,  New  York,  1834,  from  Cortlandt 
Street  to  Wall  Street.  The  site  occupied 
later  by  the  Union  Trust  Company,  at 
No.  73  Broadway,  was  directly  below 
Trinity  Church      .  .  .  .  .124 

Bond  issued  in  1876  by  the  Real  Estate  Loan 

&  Trust  Company  of  Washington,  D.  C.    .      164 

Growth  of  the  Guaranty  Trust  Company  of 
New  York,  June  30,  1892- June  30,  1916, 
inclusive       .  .  .  .  .  .      199 


Illustrations  xvii 

FAGS 

The  old  Sugar  House  and  Middle  Dutch 
Reformed  Church  (occupied  as  Post 
Office  1845-1877),  Nassau  and  Liberty 
Streets,  New  York,  1830.  Site  of  the 
Mutual  Life  Building  and  home  of  the 
United  States  Mortgage  &  Trust  Com- 
pany   .......     204 

Wall  Street,  about  1834,  looking  east  from  a 
point  opposite  the  site  of  present  Bankers 
Trust  Company  Building.  Merchants' 
Exchange  (with  dome)  at  the  right  .  .     224 

State  Street,  Boston,  1849.  From  original 
print  in  the  main  office  of  the  State  Street 
Trust  Company     .....     260 

A  Modern  Building.  Home  of  America's 
largest  trust  institution,  the  Guaranty 
Trust  Company  of  New  York.  South- 
east corner  of  Broadway  and  Liberty 
Street  ......     298 


The   Story   of 
The    Trust    Companies 


CHAPTER  I 

THE     BEGINNINGS.      1 822.      FARMERS     FIRE 
INSURANCE   &  LOAN   COMPANY 

Corporate  banking  in  the  United  States 
dates  back  to  the  days  of  the  Continental 
Congress.  In  1781  that  body  granted  a  charter 
to  the  Bank  of  North  America.  This  institu- 
tion, now  with  the  powers  of  a  National  Bank- 
ing Association,  is  still  in  business  in  Phila- 
delphia, having  reached  the  one  hundred  and 
thirty-fifth  anniversary  of  its  incorporation  on 
May  26,  1916. 

We  are  accustomed  to  consider  that  the 
earliest  establishment  of  trust  companies  oc- 
curred many  years  after  the  founding  of  the 


2         Story  of  Trust  Companies 

first  banks.  This  is  so,  but  in  point  of  corporate 
age  several  State  banks  which  have  been  re- 
organized as  trust  companies  in  comparatively 
recent  years  are  nearly  as  old  as  America's 
earliest  bank.  The  best  illustration  of  this  is 
the  Union  Bank  &  Trust  Company  of  New 
London,  Connecticut,  claiming  existence  in 
both  financial  fields  since  1792;  while  eight 
years  thereafter,  in  1800,  the  present  Wash- 
ington Trust  Company  of  Westerly,  Rhode 
Island,  was  organized,  also  as  a  State  bank, 
and  in  18 10  the  Farmers  Bank  of  Lancaster, 
Pennsylvania,  started  a  business  which  even- 
tually, almost  a  century  later,  came  to  bear  the 
name  Farmers  Trust  Company  of  Lancaster. 
Two  years  afterwards,  on  March  10,  18 12,  a 
decade  before  the  vital  statistics  of  the  trust 
companies  might  be  said  to  have  begun.  Gover- 
nor Simon  Snyder  approved  the  charter  of 
The  Pennsylvania  Company  tor  Insurances  on 
Lives  and  Granting  Annuities.  Trust  powers 
were  not  at  once  conferred  upon  this  Phila- 
delphia institution,  but  it  was  the  first  of  several 
prominent  concerns  destined  later  to  broaden 
into  the  business  of  full-fledged  trust  companies. 


Early  Nineteenth  Century  Events    3 

Before  chronicling  the  circumstances  of  this, 
and  of  subsequent  incorporations  in  the  same 
field  of  financial  activity,  a  gHmpse  should  be 
had  of  current  conditions  and  events.  By 
1 8 12,  twenty- three  years  had  elapsed  since 
Washington  was  inaugurated  as  the  first  Presi- 
dent of  the  United  States.  He  had  then  been 
dead  twelve  years,  but  John  Adams,  Thomas 
Jefferson,  and  eight  other  signers  of  the  Declara- 
tion of  Independence  were  still  living,  while 
James  Madison  was  serving  his  first  term  as 
Chief  Magistrate  of  the  Nation.  In  those 
remote  days  there  were  living  thirteen  suc- 
ceeding Presidents,  down  to  and  including  Lin- 
coln and  Johnson.  The  same  was  true  of 
certain  other  Civil  War  figures,  like  Jefferson 
Davis  and  Robert  E.  Lee,  but  Generals  Grant, 
Sherman,  Sheridan,  and  McClellan,  as  well  as 
most  of  the  other  heroes  of  that  war,  had  not 
yet  been  bom.  Only  four  States,  Kentucky, 
Vermont,  Tennessee,  and  Ohio,  had  been  joined 
to  the  original  thirteen.  The  population  of 
these  seventeen  was  approximately  seven  mil- 
lions of  people. 

Such  were  some  of  the  political  conditions 


4  Story  of  Trust  Companies 

of  the  Republic  in  1812,  when  this  forerunner 
of  a  Philadelphia  trust  company  was  formed 
for  purposes  of  "insurances  on  lives  and  grant- 
ing annuities."  In  the  same  city,  in  1793,  the 
United  States  Mint  had  been  established,  less 
than  twenty  years  before;  in  1800,  Congress 
had  met  there  for  the  last  time  before  removing 
to  Washington;  in  181 1,  the  charter  of  the  first 
Bank  of  the  United  States  had  just  expired; 
and  during  May,  18 12,  Stephen  Girard  opened 
his  celebrated  "Banking  House." 

Five  years  previous  to  this  time,  New  Yorkers 
had  seen  the  Clermont  embark  on  her  maiden 
trip  up  the  Hudson,  while  in  the  year  18 12  was 
witnessed  the  completion  of  their  new  City  Hall. 
At  this  period  New  York's  banks  numbered 
less  than  ten,  including  the  City  Bank,  char- 
tered in  the  year  mentioned.  Louisiana  had 
been  purchased  in  1803,  nine  years  before; 
only  in  1809  had  St.  Louis  become  an  incorpo- 
rated town;  and  during  1812  the  first  rolling 
mill  in  Pittsburgh  was  erected. 

But  the  event  which  bore  most  upon  the 
fortunes  of  the  newly  founded  "Pennsylvania 
Company"  was  the  breaking  out  of  hostilities 


Outbreak  of  War  in  1 8 12  5 

between  the  United  States  and  Great  Britain. 
Six  days  before  its  charter  was  signed,  that  is 
on  March  4,  18 12,  Jonathan  Russell,  our 
charge  d'affaires  at  London  wrote  to  Secretary 
of  State  Monroe:  "I  no  longer  entertain  a  hope 
that  we  can  honorably  avoid  war."  In  the 
same  month  Congress  authorized  a  6  per  cent, 
loan  of  $11,000,000;  on  June  12th  war  was 
declared;  by  July  ist  customs  duties  were 
doubled;  on  August  19th  the  American  frigate 
Constitution  met  and  vanquished  the  British 
Guerriere. 

Stirring  days  indeed  were  these  in  which 
The  Pennsylvania  Company  for  Insurances  on 
Lives  and  Granting  Annuities  came  into  being. 
Its  aims  and  activities  were  naturally  subjected 
to  immediate  handicaps.  Not  until  June  10, 
1 8 13,  did  the  newly  formed  company  open  its 
doors  for  business,  and  only  in  the  following 
year  was  any  substantial  progress  made  upon 
its  plans. 

In  a  lengthy  circular,  issued  in  18 14,  undoubt- 
edly the  first  piece  of  literature  over  the  name 
of  any  company  now  engaged  in  trust  business, 
the  management  presented 


6         Story  of  Trust  Companies 

A71  Address 

From 

The   President   and    Trustees 

Of 

The   Pennsylvania    Company 

For  Insurances  07i  Lives  and  Granting  Annuities 

To  the 

Inhabitants  of  the    United  States 

Upon  the  Subject  of 

The  Beneficent  Objects  of  that  Institution. 

Philadelphia. 

Printed  by  J.  Maxwell  &  Company 

1814. 

The  opening  words  of  the  circular  are : 

"Fellow  Citizens: 

"Among  the  various  modes  of  alleviating 
the  misfortunes  and  calamities  of  life,  which 
have  been  adopted  by  the  inhabitants  of 
Europe,  none  has  more  deservedly  engaged 
the  attention  of  the  enlightened  and  benevo- 
lent, than  the  establishment  of  institutions 
for  Insurances  on  Lives  and  Granting  An- 
nuities.^' 

Farther  along,  life  insurance,  annuities,  and 


An  Address  on  Insurance  7 

reversions  are  defined  and  illustrated,  and  the 
business  of  London  companies  is  described 
as  being  "so  extensive  that  in  thirty- three 
years,  from  January,  1768,  to  January,  1801, 
they  made  83,201  insurances  on  single  lives 
alone,  which  is  more  than  an  average  of  2500 
per  annum." 

After  presenting  various  rules,  rates,  and 
arguments  the  address  announces: 

"The  office  of  the  Company  is  open  daily 
between  the  hours  of  9  and  3  o'clock,  at  No. 
']2  South  Second  Street,  in  the  City  of  Phila- 
delphia, where  a  Committee  of  the  Directors 
sit  three  times  a  week  to  consider  and  decide 
upon  the  proposals  which  may  be  made  to 
them.  Letters  directed  to  the  President, 
post  paid,  will  be  expeditiously  attended  to 
and  answer  given  to  any  inquiries  which  may 
be  made  respecting  the  terms  and  rates  upon 
which  the  Company  will  transact  business." 

The  list  of  directors  is  also  presented,  con- 
sisting of  the  following  names:  President, 
Samuel  Yorke;  John  Bohlen,  Joseph  Peace, 
John  Claxton,  Jacob  Sperry,  Cadwallader  Ev- 
ans, Jeremiah  Warder,  Jr.,  Joshua  Longstreth, 


8         Story  of  Trust  Companies 

Condy  Raguet,  Charles  N.  Bancker,  John 
Welsh,  James  Hemphill,  William  Schlatter, 
and  Jacob  Shoemaker,  the  last  named  bearing 
the  title  of  Actuary. 

Among  the  treasures  of  the  New  York  Public 
Library  a  copy  of  this  quaint  "Address"  has 
reposed  for  many  years.  An  added  interest 
attaches  to  it  from  the  fact  that  it  was  origi- 
nally a  valued  belonging  of  Thomas  Jefferson. 
Sometime  during  1815  the  "Sage  of  Monticello," 
always  interested  in  mathematical  matters  and 
himself  the  founder  of  America's  decimal  system 
of  currency,  gathered  and  had  bound  together 
a  collection  of  eleven  so-called  Political  Pam- 
phlets. Under  this  title,  in  handsome  calf 
binding,  the  "Address  to  the  Inhabitants  of 
the  United  States"  has  lain  for  a  full  century. 
Amongst  its  companions  are  to  be  found 
titles  like,  "Cooper  on  Political  Arithmetic," 
"IngersoU  on  the  Loan  Bill,  1814,"  and  "Thorn- 
ton on  a  Constitution  for  North  and  South 
America."  The  flyleaf  of  this  volume  contains 
an  index  of  the  pamphlets  made  in  Jefferson's 
own  handwriting.  Under  his  eye  were  reviewed 
the  Pennsylvania  Company's  "Tables,"  showing 


7      //    . 

Handwritten  index  of  *'  Political  Pamphlets."  A  collection  made  by  Thomas 
Jefferson  about  1815,  containing  (No.  4)  a  reference  to  the  first  literature  issued 
by  The  Pennsylvania  Company  for  Insurances  on  Lives  and  Granting  Annuities. 


Close  of  the  War  of  1 8i  2  9 

the  expectation  of  life  at  ages  one  to  ninety, 
as  computed  on  six  different  experience  bases, 
per  calculations  both  in  America  and  abroad, 
its  "Rates"  for  $100  of  insurance  at  different 
ages  and  for  annuities  based  upon  the  lives  of 
adults  and  children.  By  him  in  his  library  in 
Monticello  was  read,  doubtless  with  studious 
care,  the  message  set  forth  in  the  text  of  the 
"Address,"  including  a  pointed  reference  by 
the  Company's  founders  to  the  problems  of 
the  year  18 12. 

For  it  would  appear  that  little  had  been 
accomplished  during  that  and  the  following 
year,  the  explanation  being  offered  that — 

"at  that  period  some  untoward  circumstances, 
among  which  was  the  expectation  of  a  war, 
depressed,  ior  the  moment,  the  disposition  of 
capitalists  to  embark  in  new  enterprises,  and 
the  subsequent  declaration  of  hostiHties 
against  Great  Britain,  rendered  it  advisable 
to  withhold,  for  a  time,  any  extraordinary 
exertions." 

General  Jackson  won  his  great  victory  at 
New  Orleans  in  January,  18 15,  and  soon  there- 


10        Story  of  Trust  Companies 

after,  on  February  nth,  the  second  war  with 
England  was  concluded  by  the  arrival  in  New 
York  harbor  of  the  British  sloop  of  war  Favorite, 
bearing  a  treaty  of  peace. 

A  period  of  reconstruction  ensued  throughout 
the  entire  country.  On  April  lo,  1816,  the 
Act  of  Congress  establishing  the  second  Bank 
of  the  United  States  was  passed  and  specie 
payments  were  resumed.  At  once  numerous 
other  banks  sought  charters  and  commercial 
business  began  to  flourish.  By  18 19,  however, 
a  depression  had  set  in.  In  that  year  the 
Government's  expenditures,  largely  in  reduc- 
tions of  some  thirty-six  millions  of  dollars  of 
war  loans,  proved  to  be  in  excess  of  receipts. 
Credit  now  began  to  contract,  employment 
became  insecure,  and  the  country  experienced 
its  first  panic.  In  1820,  a  measure  of  recovery 
from  these  embarrassments  was  enjoyed,  but 
in  1 82 1  customs  receipts  fell  to  thirteen  millions 
of  dollars,  a  sum  ten  millions  less  than  the 
annual  average  of  the  previous  five  years,  and 
business  affairs  again  became  greatly  unsettled. 

These  conditions  naturally  affected  New  York 
bankers  and  individuals,   and   the  depression 


The  First  Trust  Company        ii 

was  marked  in  degree  as  the  city  had  recently 
outstripped  Philadelphia  and  grown  to  be  the 
wealthiest  and  most  populous  American  munici- 
paHty.  Nevertheless  a  group  of  business  men 
there  was  not  deterred,  in  1822,  from  establish- 
ing the  first  company  in  the  city,  state,  and 
nation  ever  to  be  clothed  with  legal  authority 
to  "execute  any  or  all  trusts  in  their  corporate 
capacity." 

This  was  the  Farmers  Fire  Insurance  &  Loan 
Company,  chartered  February  28,  1822,  now 
The  Farmers'  Loan  &  Trust  Company  of  New 
York.  The  word  "Farmers"  as  a  part  of  the 
corporate  title  was  availed  of  primarily  for 
the  reason  that  under  the  charter  a  business 
in  rural  mortgage  loans  was  contemplated. 
It  was  a  charter  provision  that  the  "corpora- 
tion shall  have  authority  to  make  loans  on  the 
security  of  bonds  and  mortgages,  or  convey- 
ances of  improved  farms,  houses,  manufacto- 
ries, or  other  buildings."  Moreover,  Section  9 
of  the  charter  provided  for  the  choosing  of 
twenty-one  directors  in  the  City  and  County  of 
New  York,  with  out-of-town  representation  on 
the  board  by  six  others,  "one  of  whom,  at  least, 


12        Story  of  Trust  Companies 

shall  be  selected  resident  in  each  of  the  great 
districts  of  this  State."  As  time  elapsed  the 
Company  was  enabled  through  these  up-state 
connections  to  have  an  important  part  in 
certain  real  estate  developments  which  sought 
financial  assistance  from  New  York  City. 

Back  in  the  year  1794,  Robert  Morris,  the 
financier  of  the  American  Revolution,  just 
beginning  a  series  of  struggles  to  regain  his 
lost  personal  fortunes,  had  disposed  of  the  title 
to  nearly  four  million  acres  of  land  in  Western 
New  York,  known  thereafter  as  the  Holland 
Purchase.  This  title  ran  to  the  Holland  Land 
Company,  which  established  its  noted  Land 
Office  where  the  settlement  bearing  the  good 
old  Dutch  name  of  Batavia  was  created.  As 
the  years  went  by,  early  troubles  with  Indian 
chiefs  like  Red  Jacket,  Com  Planter,  and  others 
who  had  originally  owned  the  land  were  suc- 
ceeded by  dissatisfaction  on  the  part  of  the 
farmers,  and  other  settlers,  whose  contracts 
of  purchase  and  mortgages,  held  by  the  Holland 
Land  Company,  proved  to  be  more  burdensome 
than  the  makers  had  anticipated.  Finally 
these    contracts    and    mortgages    passed    into 


A  Business  in  Farmers'  Loans     13 

other  hands  and  the  farmers  in  the  western 
part  of  the  State  found  that  they  would  have 
to  deal  thereafter  with  a  group  of  New  York 
investors. 

Among  the  latter,  the  Farmers  Fire  Insiir- 
ance  &  Loan  Company  came  into  possession  of 
a  large  number  of  the  obligations  named,  and 
encountered  no  little  diflSculty  in  securing  their 
enforcement.  For  many  years  after  the  reor- 
ganization of  the  Company  under  its  new  title, 
in  1836,  communication  was  almost  constant 
between  the  institution  and  various  attorneys 
in  the  western  counties.  Only  in  comparatively 
recent  times  have  the  problems  attending  title 
searches  in  that  part  of  the  State  ceased  to 
require  extended  attention  by  the  officers  of 
the  Farmers'  Loan  &  Trust  Company,  of  old 
an  actual  and  important  holder  of  farmers* 
loans. 

The  Company's  first  public  announcement 
appeared  in  the  New  York  Evening  Post  of 
August  loth,  in  the  same  year,  and  read: 

"The    Farmers    Fire    Insurance    &   Loan 
Company.     Incorporated  with  a  capital  of 


14        Story  of  Trust  Companies 

$500,000 — Office  at  No.  34  Wall-street,  ad- 
joining the  Bank  of  New  York — open  from 
9  o'clock  A.M.  to  sunset. 

"This  Company  is  now  ready  to  receive 
proposals  for  insuring  property  of  every 
description  against  loss  or  damage  by  fire. 
The  terms  will  be  as  favorable  as  those  of 
any  other  company  in  this  city,  allowing 
liberally  for  circumstances  tending  to  diminish 
the  risk. 

"This  Company  also  has  power  granted  to 
them,  'to  receive,  take,  possess,  and  stand 
seized  of  any  and  all  property  that  may  be 
conveyed  to  them  in  trust,  and  to  execute 
any  and  all  such  trust  or  trusts  in  their 
corporate  capacity  and  name,  in  the  same 
manner  and  to  the  same  extent  as  any  other 
trustee  or  trustees  might  or  could  lawfully 
do.'  The  TRUST  property  will  be  kept,  as 
their  charter  prescribes,  wholly  separate 
from  all  other  concerns  of  the  Company,  and 
cannot,  in  any  event,  be  made  liable  for  its 
losses  or  engagements.  Any  property  so 
committed  to  them  in  trust,  will  be  in- 
vested in  such  manner  as  the  grantors  may 
chuse  [sic]  to  direct. 

"The  public  will  readily  perceive,  that  the 
advantages  of  this  Company  to  protect  pro- 
perty for  the  benefit  of  infajits  or  others,  or  to 


THE  FARMERS  FIRE  UfSURjI/fCE  AKD 
LOAN  COMPANY. 

INCORPORATED  with  a  capital  of  |f500,- 
O00-Otfic«  at  No  34  Wali-street^  adjoining 
the  bank  of  New-York— open  from  9  o'doek,  A. 
M.  to  sunset 

This  Company  is  now  ready  to  receive  propo- 
sab  for  insuring  property  of  every  description 
^instlossor  oamage  by  fire.  The  terms  will 
be  as  lavorable  as  those  of  any  other  company  in 
this  cKy,  allowing  Lberally  for  circumstances 
tending  to  diminish  the  risk. 

This  Company  also  have  power  granted  to 
them, "  to  receive,  take,  possess,  and  stand  seized 
of  auy  and  all  property  that  may  be  conveyed  to 
them  in  trust,  and  to  execute  any  aad  ail  such 
TRUST  or  TRUSTS  in  their  corporate  capacity  and 
name,  in  the  same  manner,  amd  to  the  same  ex- 
tent as  any  other  tbpstee  or  trustees  mi-ht 
or  could  lawfully  do."  The  trust  propehti 
will  be  kept,  aa  their  charter  prescribes,  wholly 
separate  from  the  other  concerns  of  the  company, 
and  cannot,  in  any  event,  he  made  liable  for  its 
losses  or  engagements.  Any  property  so  commit^ 
ted  to  them  in  trust,  will  be  invested  in  such 
manner  as  the  grantors  (rmy  chuse  to  direct. 

The  public  will  readily  perceive,  that  Uie  ad- 
vantages of  this  Company  to  prolett  property  for 
the  benefit  of  infants  oe  others,  or  to  answer  any 
specitU  purposes,  either  of  a  public  or  pncate  na  • 
ture,  are  far  ^eater  than  those  of  individual  ex- 
ecutors or  oilier  trustees,  who  are  alwavs  liable 
to  casualties,  which  no  foreeiight  can  guard  against 
or  prevent ;  as  the  numerous  and  frequent  appli- 
cation? to  the  court  of  chancery  for  filling  up  of 
vacancies  occasioned  by  death,  insolvencies,  or 


other  causes,  most  incontestably  show  ;  and  the 
expenses  of  such  proceedings  often  swallow/  up  a 
great  part  of  the  Trust  Estate.  By  placing  such 
property  in  the  charge  of  this  company,  who  hare 
continued  successi/  n,  there  can  be  no  danger 
whatever  of  any  such  casualties,  as  all  such  pro- 
perty will  be  invested  either  at  discretion  in  the 
mo  I  beneficial  manner,  for  the  sole  advantage  of 
ihe  party  conveying  the  same,  or  invested  as  the 
party  may  direct,  wiOun  the  strict  provisions  of 
any  such  trust. 

The  Company  refer,  for  further  information 
upon  this  subject,  to  their  cliarter,  a  copy  of 
which  may  be  had  by  appHcatioa  at  the  office, 
where  also  the  terms  for  any  trust  estate  may  be 
known. 

DIRECTORS. 

James  M'Bride 


RESIDENT 
Richard  Han  on 
James  Magee 
George  Griswold 
Benjam'n  Marshall 
C.  C.  Cambrdcng 
James  D'WoIf,  Jun. 
Hpnry  Wheatort 
Gabriel  L-  Lewis 
Henry  Ma<;tier 


A.  H.  Lawrence 
Benjamin  Bailey 
Thomas  Franklin 
John  Johnston 
Thomas  S.  Townscnd 
Francis  Saltus 
William  VV.  Russel 
Frederick  A.  Tracy 


NON-RESIDENT  DIRECTORS. 

Southern  District— Jamet  TallmaJgc,  Pough- 
keepsfe;  Christian  Schell,  Rhinebeck. 

Middle  District — William  James,  Albany. 

EasUrn  District— Jphn  L.  Viele,  Waterfbrd. 

Western  District— George  Andrus,  Adams, 
Jetltrson  county  ;  David  White,  Palmyra  On|a- 
no  county. 

JOHN  T.  CHAMPLIN,  President. 
>irchibafd  Mchityre,  Secrtlary, 

ane  fi 


Earliest  announcement  of  a  company  with  power  "  to  execute  trusts  "  in  a  corporate 
capacity.     From  the  New  York  "  Evening  Post,"  August  6,  1822. 


The  First  Advertisement         15 

answer  any  special  purposes,  either  of  a  public 
or  private  nature,  are  far  greater  than  those 
of  individual  executors  or  other  trustees,  who 
are  always  liable  to  casualties,  which  no  fore- 
sight can  guard  against  or  prevent;  as  the 
numerous  and  frequent  applications  to  the 
court  of  chancery  for  filling  up  of  vacancies 
occasioned  by  death,  insolvencies,  or  other 
causes,  most  incontestably  show;  and  the 
expenses  of  such  proceedings  often  swallow  up 
a  great  part  of  the  Trust  Estate.  By  placing 
such  property  in  the  charge  of  this  Company, 
who  have  continued  succession,  there  can  be 
no  danger  whatever  of  any  such  casualties, 
as  all  such  property  will  be  invested  either 
at  discretion  in  the  most  beneficial  manner, 
for  the  sole  advantage  of  the  party  conveying 
the  same,  or  invested  as  the  party  may 
direct,  within  the  strict  provisions  of  any 
such  trust. 

"The  Company  refer,  for  further  informa- 
tion upon  this  subject,  to  their  charter,  a 
copy  of  which  may  be  had  by  application  at 
the  office,  where  also  the  terms  for  any  trust 
estate  may  be  known." 

Appended   to  this   advertisement   were   the 
names     of     eighteen    Resident    Directors,    as 


i6         Story  of  Trust  Companies 

follows:  "Richard  Hanson,  James  Magee, 
George  Griswold,  Benjamin  Marshall,  C.  C. 
Cambreleng,  James  D'Wolf,  Jr.,  Henry  Whea- 
ton,  Gabriel  L.  Lewis,  Henry  Mactier,  James 
M'Bride,  A.  H.  Lawrence,  Benjamin  Bailey, 
Thomas  Franklin,  John  Johnston,  Thomas  S. 
Townsend,  Francis  Saltus,  William  W.  Russel, 
Frederick  A.  Tracy." 

This  list  was  augmented  by  the  names  of 
six  out-of-town  directors,  and  those  of  the  Presi- 
dent and  the  Secretary.  These  were:  "James 
Tallmadge,  Poughkeepsie ;  Christian  Schell, 
Rhinebeck;  William  James,  Albany;  John  L. 
Viele,  Waterford;  George  Andrus,  Adams, 
Jefferson  County;  David  White,  Palmyra, 
Ontario  County;  John  T.  Champlin,  President; 
and  Archibald  Mclntyre,  Secretary." 

This  advertisement  was  continued  day  by 
day  during  the  greater  part  of  August,  1822, 
but  before  the  end  of  that  month  a  violent  epi- 
demic of  yellow  fever  was  raging  in  lower  New 
York.  The  result  was  an  exodus  of  business 
concerns  from  the  region  affected.  On  Au- 
gust 27th  the  papers  contained  a  notice 
reading : 


"  Trust "  as  Part  of  a  Title        17 

"Farmers  Fire  Insurance  &  Loan  Company 

"The  office  of  this  Company  is  removed  for 
the  present  from  No.  34  Wall  Street  to  No.. 
15  Park  Place.  Applications  through  the 
medium  of  the  Post  Office,  or  otherwise,  will 
receive  prompt  attention." 

Three  days  later  another  announcement 
appeared  stating  that  the  Company's  quarters 
had  again  been  removed,  still  farther  uptown, 
the  new  address  being  given  as  "618  Broadway, 
two  doors  above  the  Branch  Bank." 

The  continuing  fortunes  of  this  pioneer  among 
trust  institutions  in  the  United  States  will  be 
narrated  in  subsequent  chapters,  but  the  read- 
er's attention  is  next  invited  to  an  account  of 
the  first  company  to  be  formed  with  the  word 
"trust"  included  as  part  of  a  corporate  title. 


CHAPTER  II 

1830.      NEW  YORK  LIFE  INSURANCE  &  TRUST 

COMPANY 

The  years  just  preceding  and  following  1822 
witnessed  numerous  developments  of  importance 
in  the  country  and  many  of  its  political  subdi- 
visions. The  population  had  growTi  by  1820  to 
upwards  of  nine  millions  and  a  half;  its  center, 
however,  was  no  farther  west  than  a  point  within 
the  State  of  Virginia.  Louisiana  was  admitted 
to  statehood  in  18 12,  Indiana  in  1816,  Missis- 
sippi, Illinois,  Alabama,  Maine,  and  Missouri 
in  the  successive  years  from  181 7  to  1821. 
The  State  last  named  brought  the  total  in  the 
Union  up  to  twenty-four.  In  the  spring  of 
1 81 6,  Pittsburgh  was  incorporated  a  city;  on 
July  4,  18 1 7,  ground  was  broken  for  the  Erie 
Canal;  and  in  the  same  year  the  first  line  of 
packet  ships  was  established  between  New  York 

and   Liverpool,   while   a   steam   ferryboat   had 

18 


Some  Contemporary  Events      19 

first  plied  the  East  River  between  New  York 
and  Brooklyn  three  years  earlier.  In  181 8, 
the  steamboat  Walk-in-the-Water,  sailing  from 
Buffalo,  arrived  at  Detroit;  1819  saw  steam 
navigation  undertaken  between  New  Orleans 
and  St.  Louis,  and  in  the  same  year  came  a 
slowly  reported  account  of  the  safe  passage 
across  the  Atlantic  of  the  steamship  Savannah. 
Also,  in  18 19  Cincinnati  became  a  city,  and  in 
1820  petroleum  springs  were  first  discovered  in 
the  State  of  Ohio. 

In  New  York  City  the  first  savings  institu- 
tion, the  Bank  for  Savings,  was  opened  on 
July  3,  1 819,  and  so  entered  that  field  three 
years  before  the  Farmers  Fire  Insurance  & 
Loan  Company  was  organized  for  trust  business. 
New  York's  only  theater,  the  Park,  was  de- 
stroyed by  fire  and  rebuilt  in  1821.  Shortly 
afterward,  in  1824,  a  great  celebration  took  place 
in  New  York  on  the  occasion  of  General  La- 
fayette revisiting  America.  The  year  1825  was 
notable  for  the  completion  and  opening  of  the 
Erie  Canal ;  also  the  first  railroad,  the  Mohawk 
and  Hudson,  was  chartered,  and,  as  illustrations 
of  other  developments  following  close  upon  the 


20        Stoiy  of  Trust  Companies 

beginnings  of  trust  company  operations  in  the 
Metropolitan  City,  it  may  be  noted  that 
in  1825  the  Gothamites,  as  they  had  been 
dubbed  by  Washington  Irving  eighteen  years 
before,  first  made  use  of  illuminating  gas,  first 
attended  Italian  opera,  and  enjoyed  the  innova- 
tion of  a  Sunday  newspaper.  Within  the  ten 
years  following  1820  such  private  institutions 
were  organized  as  Bloomingdale  Asylum,  the 
Hebrew  Benevolent  and  Orphan  Asylum,  the 
Eye  and  Ear  Infirmary,  the  New  York  Bible 
Society,  the  American  Tract  Society,  the 
National  Academy  of  the  Arts  of  Design,  the 
Seamen's  Friend  Society,  and  the  American 
Institute. 

During  1829  the  first  railroad  locomotive 
was  run  and  in  the  following  year  came  another 
innovation  in  the  form  of  an  institution  styling 
itself  a  "trust  company." 

Similarly  to  all  such  enterprises  begun  within 
the  early  years,  this  concern  cautiously  laid 
plans  with  more  than  one  string  to  its  bow  and, 
whereas  the  "Farmers  Fire"  had  already  estab- 
lished itself  in  the  field  of  both  underwritings 
and   trust   undertakings,   the  founders  of  this 


The  Second  Incorporation        21 

newer  concern  set  out  to  perform  a  dual  func- 
tion as  well,  calling  their  institution  the  "New 
York  Life  Insurance  and  Trust  Company." 

The  charter  was  secured  on  March  9,  1830, 
after  a  considerable  amount  of  heated  debate 
had  occurred  at  Albany  involving  the  pros  and 
cons  of  so  unusual  an  enterprise.  The  author- 
ized capital  was  one  million  dollars  and  the 
trust  powers  conferred  upon  the  company  were 
very  similar  to  those  heretofore  shown  for 
the  Farmers  Fire  Insurance  &  Loan  Company. 
The  charter  constituted  thirty  trustees  as  a 
board,  and  an  inspection  of  their  names  will 
show  how  representative  a  group  of  New  York 
business  men  was  thus  identified  with  the  new 
Company.  The  trustees  were:  William  Bard, 
Stephen  Van  Rensselaer,  Isaac  Bronson,  James 
Kent,  Gulian  C.  Verplanck,  Abraham  Blood- 
good,  Edward  R,  Jones,  John  Jacob  Astor, 
Saul  Alley,  John  Duer,  Robert  Lenox,  Walter 
Bowne,  Nathaniel  Prime,  Philip  Hone,  Peter 
Augustus  Jay,  John  Mason,  Peter  Lorillard, 
Thomas  W.  Ludlow,  William  B.  Lawrence, 
Jonathan  Goodhue,  Samuel  Thompson,  William 
James,  Peter  Remsen,  Isaiah  Townsend,  Ben- 


22        Story  of  Trust  Companies 

jamin  Knower,  Stephen  Whitney,  Benjamin 
F.  Butler,  Thomas  J.  Oakley,  Edward  C. 
Delavan,  and  Garrit  Storm. 

An  organization  meeting  of  these  trustees 
was  held  on  April  12,  1830,  at  the  Merehants' 
Exchange  and  William  Bard  was  chosen  Presi- 
dent. Notice  was  shortly  afterward  given 
that  a  committee  would  open  the  books  and 
receive  subscriptions  for  the  stock.  This  latter 
event  occurred  on  the  7th  of  May.  A  resolu- 
tion was  passed  providing  that  the  incorpora- 
tors, those  named  above  with  thirty-one  others, 
might  subscribe  in  each  case  for  one  hundred 
shares  of  the  stock  of  the  Company,  which 
consisted  of  ten  thousand  shares,  each  of  a  par 
value  of  one  hundred  dollars,  making  a  total 
of  one  million  dollars.  It  was  further  stipu- 
lated that  no  person  would  be  allowed  to  sub- 
scribe for  more  than  one  hundred  shares  and 
that  the  incorporators'  subscriptions  should 
be  given  first  consideration,  after  which  a  distri- 
bution to  outsiders  should  be  made  by  lot, 
that  is,  "by  drawing  the  letters,"  meaning 
letters  of  application.  In  this  respect  no 
thought  seems  to  have  been  given  to  the  modern 


Advertisements  of  1830  23 

method  of  stock  allotments  in  the  discretion 
of  committees,  with  the  frequently  availed  of 
privilege  of  "rejecting  any  or  all  applications." 
On  April  226.  an  advertisement  appeared 
informing  the  public  that  the  Company's  busi- 
ness would  be  conducted  in  the  East  Room  of 
the  City  Bank,  opposite  the  Merchants'  Ex- 
change. Calls  were  made  for  10  per  cent,  of 
the  stock  subscriptions  and  notice  was  given 
that,  according  to  the  seventh  section  of  the 
charter, 

"the  whole  of  the  capital  is  to  be  invested 
in  bonds  and  mortgages  on  unencumbered 
real  estate  within  the  State  of  New  York, 
and  at  least  one-half  thereof  shall  be  con- 
stantly invested  on  real  property  within  the 
limits  of  the  City  and  County  of  New  York." 

This  advertisement  concluded  with  the  words: 

"N.  B.  The  Editors  of  Country  papers  who 
may  think  the  above  important  to  their 
subscribers,  may,  if  they  think  proper,  insert 
the  above  in  their  papers.  Letters  to  the 
President  must  be  post  paid." 

On  Saturday,  May  8th,  the  New  York  Even- 
ing Post  gave  the  Company  a  lengthy  editorial 


24        Story  of  Trust  Companies 

notice,  undoubtedly  the  first  of  its  kind  ever 
to  appear.  Among  other  things  set  forth  in 
this  article  was  the  fact  that  the  sixty-one 
incorporators  had  each  taken  his  allotment  of 
stock,  making  a  total  at  par  of  $610,000.  The 
editorial  continued: 

"Applications  were  received  for  about 
$12,000,000,  against  which  only  $390,000 
could  be  'distributed  this  morning  by  lot- 
tery,' and  as  five  per  cent,  premium  was 
offered  for  it  by  the  Brokers  yesterday, 
there  was  great  anxiety  manifested  to  ascer- 
tain who  were  the  fortunate  persons  who 
had  drawn  prizes.  The  result  was  made 
known  about  12  o'clock  by  posting  the  names 
in  the  different  bulletin  offices.  There  were 
about  thirty-one  blanks  to  a  prize.  The 
stock  was  sold  this  day  at  the  Board  of 
Brokers  for  six  per  cent,  advance." 

The  editor  of  the  Post  completed  his  descrip- 
tion of  these  transactions  by  inquiring: 

"Does  the  eagerness  with  which  this  stock 
has  been  sought  for  indicate  anything  but  a 
disposition  for  speculation?  Or  is  it  an  evi- 
dence of  money  being  plenty  in  our  market 


Stock  Quotations  25 

and  of  a  desire  to  make  investments  which 
will  yield  a  fair  interest?" 

Two  days  later,  on  May  loth,  there  were 
local  stock-exchange  quotations  published,  cov- 
ering seven  different  issues.  Save  for  150  shares 
of  United  States  Bank,  ranging  from  1303^ 
to  130^:4,  no  other  stock  was  reported  at  as 
high  a  price  as  255  shares  of  "Life  Insurance 
and  Trust  Company"  at  106^.  On  June 
28th,  a  lengthy  statement  was  published  in  the 
name  of  the  trustees  who  gave  "notice  to 
the  public  that  they  are  ready  to  commence  the 
business  which  by  their  charter  they  are  author- 
ized to  transact."  The  features  of  the  pro- 
posed business  were  described  as  follows : 


II I 


'They  will  insure  Hves  and  purchase  and 
sell  annuities.  They  will  receive  money  in 
trust,  pay  interest  thereon  and  accumulate 
the  same.  A  third  branch  of  business  will 
extend  to  the  acting  as  trustees  under  last 
wills  and  testaments,  as  guardians  of  estates 
of  infants,  as  receivers  of  the  property  and 
effects  of  insolvents  and  dissolved  or  sus- 
pended  corporations,    as   the   committee   of 


26        Story  of  Trust  Companies 

the  estates  of  lunatics  and  as  assignees  for 
the  benefit  of  creditors." 

Curiously  enough  the  management  laid  out, 
from  the  very  beginning,  a  policy  of  paying 
interest  on  deposits,  a  practice  which  in  years 
to  come  was  to  involve  the  banks  and  trust 
companies  of  the  entire  country  in  a  question 
of  conflicting  opinion  as  to  their  respective 
functions.  Probably  the  thought  of  these  early 
trust  company  founders  was  not  directed  to- 
ward competition  with  the  banks,  but  their 
notice  of  the  early  summer  of  1830  distinctly 
specified  that — 

"The  Company  will  receive  money  in 
trust,  and  issue  certificates  therefor,  on  the 
following  conditions.  No  deposite  shall  be 
received  imder  one  hundred  dollars,  nor  shall 
any  sum  less  than  that  amount  be  drawn  un- 
less as  the  balance  of  an  account.  All  moneys 
deposited  in  trust  for  a  shorter  time  than 
one  year  shall  be  deposited  for  a  certain 
number  of  months,  not  less  in  any  case  than 
two  months  from  the  date  of  the  deposite. 
Interest  at  the  rate  of  three  per  cent,  per 
annum  will  be  allowed  on  moneys  not  de- 


Interest  on  "  Deposites  "  27 

posited  for  a  longer  term  than  four  months. 
Where  the  term  shall  exceed  four  months 
and  be  less  than  a  year,  four  per  cent,  will 
be  allowed.  Where  the  deposite  shall  exceed 
a  year,  the  rate  of  interest  shall  be  settled  by 
special  agreement.  In  all  cases  where  the 
moneys  in  trust  shall  not  be  withdrawn  at  the 
expiration  of  the  period  for  which  they  were 
deposited  in  trust,  they  shall  remain  with 
the  Company  for  another  period  of  not  less 
than  thirty  days,  and  be  allowed  the  same 
interest  as  if  originally  deposited  for  the 
extended  period.  Where  the  trust  shall 
exceed  a  year,  interest  may  be  made  payable 
before  the  principal  shall  become  due,  annu- 
ally, half  yearly,  or  quarterly,  as  may  be 
agreed  on.  Where  the  trust  shall  be  for  a 
shorter  period  than  a  year,  no  interest  will 
be  paid  until  the  principal  shall  become  due." 


Such  were  the  beginnings  of  the  second  Ameri- 
can trust  company.  Its  charter  contained 
several  unusual  requirements.  One  of  these 
provided  that  the  trustees  shall  elect  their  suc- 
cessors, another  that  the  trustees  must  in  all 
instances  be  citizens  of  the  State  of  New  York. 
In  1830  the  City  Bank  purchased  the  site 


28        Story  of  Trust  Companies 

of  the  old  United  States  Bank  at  No.  40,  now 
52,  Wall  Street,  erected  in  1791.  Here  the 
trust  company  took  up  its  quarters,  and  in  the 
trustees'  room  there  is  still  preserved  to-day 
the  cornerstone  of  the  former  bank  building. 

An  order  was  issued  by  the  Chancellor  of 
the  State  of  New  York  under  date  of  Novem- 
ber 19,  1 83 1,  requiring  the  trustees  to  pre- 
sent a  statement  from  year  to  year  showing 
their  "situation  and  affairs."  The  Company's 
answers  from  year  to  year  comprise  a  set  of 
the  earliest  trust  company  reports  extant. 
Eight  years  after  the  charter  was  given,  on 
January  i,  1838,  several  interesting  facts  re- 
garding the  Company's  progress  were  recorded. 
Their  $1,000,000  of  capital  was  loaned  out  on 
bond  and  mortgage,  none  of  which  was  in  suit 
or  judgment  on  which  prosecution  had  been 
ordered.  The  Company  had  no  other  loans 
on  bond  and  mortgage,  aside  from  loans  to 
moneyed  corporations,  or  to  their  officers  or 
agents,  which  amounted  to  $4,740,742,55.  The 
total  number  of  loans  was  4079,  of  which  thirty- 
two  were  being  foreclosed,  representing  prin- 
cipal amounting  to  $57,307.      The   Company 


Loans  on  Stocks  of  Sister  Companies  29 


had  collateral  loans  amounting  to  $481,268.41, 
and  in  a  list  of  collaterals  showed,  among  the 
rest,  some  shares  of  three  sister  trust  companies 
of  which  mention  is  to  be  made  farther  along. 
The  lists  contained  these  particulars : 


Name  of  Stock 

Amount 
Loaned 

Number 
of  Shares 

Market 
Value 

American  Life  Insur- 
ance &  Trust  Co. 

Farmers'  Loan  &  Trust 
Co. 

Ohio  Life  Insurance 
&  Trust  Co. 

$31,679-56 

24,423-51 
25,250.00 

764 

553 

280 

I50 

50 

100 

6%  discount 
6%  premium 
2%  discount 

At  this  time  the  Bank  of  New  York  was 
quoted  at  22  per  cent,  premium,  the  Man- 
hattan Company  at  25  per  cent,  premium,  and 
the  Chemical  Bank  at  10  per  cent,  premium. 
Many  of  the  fire  insurance  companies  were  at 
a  discount,  but  the  stock  of  the  Utica  Railroad 
Company  was  listed  at  19  per  cent,  premium. 

It  was  stated  that,  "In  the  Company  are  the 
owners  of  the  following  stocks."  Here  followed 
a  Hst  of  ten  New  York  City  banks  showing  that 


30        Story  of  Trust  Companies 

the  holdings  of  these  investors  were  $i  1 1,442.96. 
The  Company  was  said  to  own  three  farms 
taken  under  foreclosure,  two  in  Oswego,  and 
one  in  Erie  County. 

The  "deposites"  held  in  trust  were  $3,194,- 
466.77.  Although  this  was  long  before  the 
days  of  reserve  requirements,  it  seems  a  little 
strange  to  read  that  "the  whole  amount  of 
money  on  hand  the  first  day  of  January,  1838, 
was  $35.56,  being  the  balance  laying  in  the 
Manhattan  Bank,  in  which  all  the  deposites 
of  the  Company  are  made."  On  this  same 
date  there  was  cash  due  from  country  banks, 
etc.,  amounting  to  $80,092.97.  The  books 
and  office  furniture  were  valued  at  two  hundred 
dollars 

It  was  stated  that : 

"the  Company  have  received  no  money  in 
trust  to  be  invested  at  the  risk  and  for  the 
benefit  of  the  persons  for  whom  such  moneys 
were  received;  all  moneys  which  have  hitherto 
been  received  in  trust  are  at  the  risk  of  the 
Company  and  under  their  management;  1410 
life  insurance  policies  have  been  issued,  of 
which    706   remain   in   force;    the   youngest 


Other  Developments  of  the  Thirties  31 

age  is  twelve  and  the  oldest  seventy-one; 
the  face  of  the  policies  represent  $2,385,570; 
the  officers  and  their  salaries  are : 

William  Bard,  President  I5000  per  annum 

Edward  A.  Nicoll,  Secretary  4000     "         " 

Chas.  C.  Palmer,     Assistant  Secretary  2000     "         " 

Philip  R.  Kearney,  Clerk  1800     "         " 

Joseph  R.  Kearney,  Clerk  250     "         " 

and  the  Company  have  surplus  and  undivided 
profits  of  $311,714.88." 

The  later  growth  of  the  New  York  Life 
Insurance  &  Trust  Company,  continuing  down 
to  present  times,  will  be  hereinafter  sketched. 
Next  in  our  story,  however,  are  to  be  related 
some  facts  respecting  other  developments  of 
the  thirties  in  the  fields  of  banking,  trust 
company,  and  related  affairs. 


CHAPTER  III 

1836.      farmers'    loan    &    TRUST    COMPANY. 

THE    "PENNSYLVANIA    COMPANY,"    AND 

THE  GIRARD 

The  decade  beginning  1830  was  marked  by 
several  interesting  events.  In  the  spring  of 
1 83 1  the  New  York  and  Harlem  Railroad,  the 
country's  first  street  railway  system,  was  incor- 
porated. During  the  summer  the  Mohawk  and 
Hudson  Railroad  was  opened  as  a  freight  and 
passenger  line;  the  launching  of  the  famous 
steamship  Great  Western  occurred  in  1837; 
and  in  the  same  year  a  beginning  was  made  in 
the  line  of  express  business. 

But  as  reminders  of  how  early  a  period  it  was 
in  which  the  trust  companies  were  beginning 
to  establish  themselves,  it  should  be  stated  that 
not  until  1832  was  Buffalo  chartered  as  a  city, 
and  that  Chicago  only  became  an  incorporated 
town  in  1833.     A  year  later,  New  York  held 

32 


Expansion  in  Banking  Affairs     33 

its  first  election  of  a  mayor  by  the  people,  and 
in  1834  s-i^d  1836  city  governments  were  estab- 
lished for  Brooklyn  and  Cleveland  respec- 
tively while  in  1838,  Morse's  invention,  the 
telegraph,  was  being  first  exhibited  and  daguer- 
reotypes were  being  introduced  in  the  United 
States. 

Despite  the  progress  of  these  years,  however, 
many  grave  financial  problems  were  arising, 
and  these  came  to  a  culmination  in  the  disastrous 
failure  of  the  Second  Bank  of  the  United  States. 
President  Jackson's  controversies  with  Con- 
gress, and  with  the  management  of  the  Bank, 
began  in  1829,  and  continued  until  the  outbreak 
of  the  panic  of  1837. 

The  panic  itself  was  preceded  by  a  period  of 
widespread  expansion  in  the  banking  world. 
Governor  Marcy  of  New  York,  in  his  message 
transmitted  to  the  Legislature  in  1834,  reported 
that  during  the  previous  four  years  nine  mil- 
lion dollars  had  been  added  to  the  banldng 
capital  of  the  State;  also  that  105  new  banks 
had  published  notices  of  intention  to  organ- 
ize with  aggregate  capital  of  fifty-six  million 
dollars. 


34        Story  of  Trust  Companies 
He  remarked: 

"Banks  are  now  regarded  as  necessary 
establishments;  but  I  cannot  believe  they 
are  required  to  the  extent  now  asked  for. 
Banking  privileges,  not  only  as  they  are 
granted  by  this  State,  but  as  they  exist  in 
almost  every  country,  are  a  monopoly  which 
ought  not  certainly  to  be  increased  beyond 
the  actual  exigencies  of  the  public." 

In  the  same  message  he  advanced  a  theory 
which,  to  our  modern  view,  sounds  like  an 
absurdity  but  which  was  probably  not  so 
utterly  impractical  in  those  days  of  over- 
extension of  banking  facilities.     He  said: 

"If  any  means  could  be  devised  to  cause 
the  stock  to  go  into  the  hands  of  those  to 
whom  it  is  distributed,  worth  only  its  par 
value,  I  think  there  would  be  much  less  so- 
licitude for  the  increase  of  banks.  Whatever 
value  is  given  to  the  stock  above  the  sum 
paid  for  it,  in  consequence  of  the  franchise 
or  peculiar  privileges  granted  to  the  corpora- 
tion, may,  upon  any  princi^Dles  of  justice, 
be  withheld  from  the  subscribers,  and  right- 
fully claimed  by  the  State;  and  it  is  a  cause 


Warnings  Against  Inflation       35 

of  regret  that  some  provision  to  effect  this 
object  had  not  long  since  been  adopted." 

While  admitting  some  objections  to  this 
plan — for  example,  that  former  applicants  would 
have  received  advantages  now  to  be  denied  to 
others  of  equal  merit,  he  suggested  that  an 
effective  mode  of  curbing  the  evils  would  be 
by  withholding  from  the  original  owners  the 
premium  on  bank  stock,  by  making  offers  of  the 
latter  at  public  sale,  and  reserving  to  the  State 
the  advance  above  the  par  value.  Against 
this  the  drawback  was  presented  that  such 
an  arrangement  would  facilitate  the  concentra- 
tion of  stock  in  the  hands  of  a  few  wealthy 
individuals,  while  the  desire  of  supplying  the 
wants  of  an  exhausted  treasury,  or  of  increasing 
a  favorite  fund,  might  possibly  operate  as  an 
inducement  to  grant  applications  which  would 
not  be  sustained  on  the  ground  of  public  utility ; 
with  the  added  objection  that  combinations 
by  speculators  at  the  sale  might  also  prevent 
fair  competition  and  engross  the  stock.  Other 
suggestions  by  the  Governor  were  a  general 
reduction  of  interest  on  all  loans  and  other 


36        Story  of  Trust  Companies 

contracts,  so  as  to  make  banking  business  less 
attractive,  and  the  limitation  in  amount  of 
circulating  notes  to  a  sum  equal  to  the  capital 
of  each  bank. 

The  newspapers  of  1836  were  filled  with 
headlines  of  warning  against  the  inflation  then 
taking  place  in  the  creation  of  new  moneyed 
corporations.  Some  of  these  read  "Banks! 
Banks!"  and  one  editorial  writer  began  an 
article  by  inquiring:  "Are  the  people  of  this 
country  really  becoming  bank  mad?"  Never- 
theless within  this  era  of  over- development 
there  were  several  new  departures  in  the  line 
of  trust  business,  and  some  of  these,  although 
they  embarked  upon  a  tempestuous  sea,  were 
fated  to  outride  the  perils  of  the  thirties  and 
sail  prosperously  on  during  all  the  years  to  come. 

That  the  Farmers  Fire  Insurance  &  Loan 
Company  was  prospering  is  to  be  seen  from  an 
advertisement  published  early  in  1831,  which 
announced : 

"The  Board  of  Directors  of  this  company 
have  this  day  declared  a  dividend  of  three 
and  a  half  per  cent,  on  the  capital  stock, 


Opinion  Against  ''Farmers  Fire"  37 

payable  at  their  office  on  and  after  the  third 
day  of  January  next.  The  Transfer  Book 
will  be  closed  from  the  24th  inst." 


Its  charter  had  been  granted  for  a  period  of 
fifteen  years,  dating  from  1822.  Early  in  the 
year  1836,  action  was  taken  looking  toward 
securing  a  renewal  with  a  change  of  title  to 
include  the  word  "trust."  Before  this  was 
accomplished  a  large  amount  of  discussion  took 
place  regarding  the  doubted  wisdom  of  trust 
company  activities  in  general,  and  of  the  Far- 
mers' in  particular.  The  public  prints  were 
opened  to  the  debate;  scathing  denunciations 
appeared  alleging  the  illegality  of  corporate 
appointments  as  receiver  or  guardian,  when 
exercised  by  a  "fire  insurance  company";  po- 
litical influences  were  complained  of;  the  un- 
righteousness of  most  forms  of  current  trust 
company  enterprise  was  dwelt  upon  in  a  long 
series  of  protests  and  appeals  addressed  to  the 
reading  public. 

An  article  which  appeared  during  this  period 
over  the  signature  "A  Stockholder"  is  here 
copied  from  the  New  York  Times  (not  however 


38        Story  of  Trust  Companies 

the  present  daily,  established  some  fifteen  years 
later) .     It  read : 

"Farmers   Fire   Insurance   Company 

"A  writer  in  the  Journal  of  Commerce  of 
Saturday  last  is  guilty  of  a  most  impertinent 
interference  in  the  affairs  of  this  company. 
He  takes,  substantially,  the  ground  that 
because  the  Farmers  Fire  Insurance  Com- 
pany have  the  right  to  insure  against  fire, 
they  are  bound  to  continue  that  business 
against  their  own  interests.  This  company 
has  very  large  trust  powers.  They  may 
'execute  any  trusts  to  the  same  extent  and  in 
the  same  manner  as  any  trustee, '  says  the 
chapter  expressly.  This  and  other  powers 
in  the  charter  enables  the  company  to  receive 
money  in  deposite  and  to  issue  their  bonds 
or  certificates  therefor  redeemable  years 
hence.  This  kind  of  business  is  much  more 
profitable  to  the  stockholders  than  the  dan- 
gerous business  of  Fire  Insurance  and  the 
directors  of  the  company  are  entitled  to  the 
thanks  of  the  stockholders  for  having  dis- 
continued that  branch  of  business,  and 
developed  the  hitherto  latent  or  dormant 
powers  of  the  company  to  the  great  benefit 
of  the  publick.     The  Company  has  power  to 


Protest  Against  Re-incorporating  39 

insure  lives,  though  but  little,  if  any,  of  this 
business  has  been  transacted,  on  account  of 
the  charter's  expiring  next  winter.  The 
institution  is  so  useful  to  the  publick,  and 
the  managers  of  it  so  highly  respectable  and 
wealthy,  and  have  so  much  political  influ- 
ence, that  there  is  no  doubt  the  charter  will 
be  renewed  and  made  perpetual  this  winter, 
and  the  name  of  'Fire  Insurance'  stricken 
out.  Now,  is  it  not  reasonable  that  a  com- 
pany possessing  these  powers  should  not  lay 
them  aside,  and  go  on  with  a  Fire  Insurance 
business?  It  is  to  be  remembered  that  the 
Fire  Insurance  business  is  wholly  incompati- 
ble with  the  business  now  carried  on  by  the 
Company. 

"Who  would  deposite  money  with  the 
Company,  who  would  buy  their  bonds  (and 
they  have  a  half  a  million  of  dollars  of  bonds 
now  in  circulation,  and  as  much  more  is 
soon  to  be  out,  redeemable  in  twenty  years) 
if  the  Company  continues  the  Fire  Insurance 
business  ? 

"Who  if  the  Company  is  liable  to  be  ruined 
in  a  single  night  by  fire  risks  would  take  their 
grant  of  annuity  for  a  term  of  years? 

' '  Who  would  sell  the  Company  an  annuity 
and  take  their  bonds  or  other  evidences  of 
debt  in  payment  ? 


40        Stoi*)^  of  Trust  Companies 

"Other  Companies  for  Fire  risks  can  be 
created,  and  this  Company  left  to  pursue 
the  business  most  profitable  to  the  owners  of 
the  stock  and  quite  as  useful  to  the  publick." 

This  called  forth  an  attack  upon  the  Com- 
pany, then  and  now  the  oldest  of  its  kind  in 
the  country,  in  the  form  of  the  following  letter 
to  the  Evening  Post : 

' '  From  the  tenor  of  this  argument  (quoting 
'  Stockholder's '  letter)  I  presume  it  comes  from 
the  pen  of  some  one  of  the  managers  of  the 
institution  who  are  stated  to  be  so  highly  re- 
spectable, a?id  wealthy,  and  to  have  so  much 
POLITICAL  INFLUENCE  that  there  is  no  doubt 
the  charter  will  be  renewed  and  made  perpetual 
this  winter  and  the  name  of  'Fire  Insurance* 
stricken  out.  Some  of  these  most  respectable, 
wealthy,  and  influential  managers  of  this  insti- 
tution have  been  suspected  of  having  some- 
thing to  do  with  the  management  of  the  able 
journal  in  which  the  communication  of  'A 
Stockholder'  appears. 

"The  New  York  Life  Insurance  &  Trust 
Company  was  chartered  in  1830,  with  a 
capital  of  07ie  million  dollars,  and  who  is 
there   now   in   this   community,    except   the 


Political  Influence  Charged        41 

persons  interested  in  that  institution,  that 
does  not  regret  it.  The  Farmers  Fire 
Insurance  and  Loan  Company,  with  a  capital 
of  two  millions  oj  dollars,  claims  substantially 
the  same  powers  as  the  Trust  Company, 
but  they  only  want  the  legislature  to  be  so 
kind  as  to  grant  them  further  privileges.  As 
I  am  one  of  these  unfortunaJ;e  men  who  are 
opposed  to  all  monopolies  of  this  description, 
and  happen  to  know  something  of  this  insti- 
tution, I  feel  disposed  to  make  some  little 
examination  into  its  actual  powers,  and  its 
claims  to  the  favor  and  kindness  of  the  repre- 
sentatives of  the  people. 

"The  Farmers  Fire  Insurance  &  Loan 
Company  was  chartered  for  fifteen  years  on 
the  28th  of  February,  1822.  On  the  17th 
of  April,  1822,  an  amendment  to  the  charter 
was  enacted  conferring  on  the  Company 
certain  limited  trust  powers.  For  thirteen 
years  the  Company  was  content  with  the 
ample  profits  secured  by  their  legitimate  busi- 
ness of  fire  insurance,  but  after  the  N.  Y. 
Life  and  Trust  Company  sprung  into  exist- 
ence, clothed  with  immortality  and  perfect 
freedom  of  action,  the  Farmers  Fire  Insurance 
and  Loan  Company  began  to  feel  the  spirit 
of  avarice  and  gain  stirring  within  them. 
Three  ineffectual  attempts  were  subsequently 


42        Story  of  Trust  Companies 

made  by  the  President  of  the  Company  to 
prevail  upon  the  legislature  to  amend  the 
charter  by  striking  out  the  name  of  'Fire 
Insurance,'  and  making  it  a  close  corporation, 
the  directors  having  power  to  perpetuate 
their  own  succession  and  existence  in  office 
independent  of  the  stockholders,  and  accord- 
ing to  the  example  of  the  New  York  Life  In- 
surance and  Trust  Company.  Within  the 
last  year,  and  since  the  death  of  that  gentle- 
man, and  with  a  view  to  the  operations  this 
winter  in  the  legislature,  much  pains  have 
been  taken  to  select  from  the  mo7iopoly 
democrats  throughout  this  state  and  city, 
such  persons  to  share  the  plunder  contem- 
plated to  be  seized  in  the  name  of  this  corpo- 
ration, as  from  their  political  standing  with 
the  democratick  party  were  supposed  to  be 
most  able  to  procure  the  legislation  sought  for 
in  aid  of  the  charter.  Simultaneously  with 
this  measure  of  securing  pubHc  influence, 
the  capital  has  been  increased  to  two  mil- 
lion dollars,  their  legitimate  business  of  fire 
insurance  has  been  discontinued  by  a  bye- 
law  of  the  company,  and  fancying  that  an 
amendment  of  the  17th  April,  1822,  confers 
ample  authority,  all  the  energies  of  the 
company  are  now  devoted  to  that  description 
of  business  indicated  by  the  published  bye- 


A  ** Charmed"  Corporation       43 

laws  and  advertisements  of  the  Company; 
their  main  business  being  however  the  re- 
ceiving of  money  on  deposit  at  a  low  rate 
of  interest,  issuing  therefor  ^certificates^  of 
deposit,  another  name  for  post  notes  and 
bonds  transferable  and  bearing  interest,  the 
whole  operation  being  nothing  else,  substan- 
tially, than  a  revival,  under  the  sanction  of 
imposing  names,  of  the  reprobated  business 
of  the  Bond  Companies  of  the  memory  of 
1826.  Application  is  now  made,  or  soon 
will  be,  to  the  legislature  to  get  rid  of  the 
name  which  the  legislature  gave  the  Company 
as  a  fire  office,  and  for  other  material  amend- 
ments in  aid  of  the  financial  operations  and 
brokerage  now  carried  on  by  them. 

"Since  the  late  calamitous  fire,  the  mer- 
chants and  other  citizens  of  New  York  are 
destitute  of  insurance  offices,  except  two  or 
three  companies  with  small  capitals,  and 
calculated  only  for  the  up-town  business 
where  they  are  located.  The  consequence 
is,  that  premiums  of  insurance  to  a  large 
amount  are  now  sent  abroad,  seeking  policies 
in  other  cities,  in  the  villages  in  all  parts  of 
the  United  States,  and  with  the  agents  of  a 
British  Fire  Company  at  Norfolk.  Three 
times  the  amount  of  the  former  rates  of 
insurance  are  now  required  to  be  paid  by  our 


44        Story  of  Trust  Companies 

citizens,  and  to  strange  companies,  of  whose 
solvency  they  can  know  but  Httle.  Under 
these  circumstances,  the  citizens  naturally 
looked  to  the  Farmers  Fire  Insurance  Com- 
pany for  relief,  and  it  was  for  many  days 
believed  that  in  this  dilemma  that  the  Com- 
pany would  not  refuse  to  answer  the  end 
for  which  it  was  created,  but  keeping  in  view 
the  object  of  their  existence,  would  resume 
the  business  of  fire  insurance  on  fair  and 
usual  terms,  to  the  manifest  accommodation 
and  benefit  of  the  city.  With  a  capital  of 
two  millions  of  dollars  this  company  might 
supply,  to  a  great  extent,  the  wants  of  the 
city  in  respect  to  fire  insurance.  But  dealing 
in  money,  stocks,  and  other  securities,  and 
issuing  'certificates'  for  the  payment  of 
money,  proves  so  profitable  that  this  corpora- 
tion is  charmed  away  from  its  publick  duty, 
and  they  shut  the  door  in  the  face  of  citizens 
who  ask  for  fire  policies,  and  tell  them  'the 
Company  has  declined  that  business.'  This 
conduct  on  the  part  of  the  Farmers  Fire 
Insurance  and  Loan  Company  has  induced 
an  examination  of  their  charter,  and  an 
inquiry  has  been  instituted  as  to  the  power 
of  the  company  to  carry  on  the  business  they 
propose  to  do  in  their  advertisements,  and 
which  it  appears  by  their  bye-laws  they  are 


Re-incorporation  of  Farmers      45 

now  transacting.  But  as  this  communica- 
tion might  be  inconveniently  long,  if  you 
should  think  proper  to  publish  it,  I  will  defer 
the  comments  upon  the  charter  and  present 
them  in  another  communication.  Those 
comments  will  be  founded  upon  the  reasoning 
of  opinions  of  two  of  the  most  able  counsellors 
in  this  city.  These  opinions  I  have  had  an  op- 
portunity to  examine  with  care.  If  they  were 
under  my  control  I  would  present  them  en- 
tire ;  and  I  shall  not  fail  to  give  them  as  nearly 
and  literally  as  I  can  recollect  their  terms. 
These  opinions,  I  have  been  informed,  have 
been  examined  and  sanctioned  by  one  of  the 
ablest  lawyers  in  the  United  States,  and  for- 
merly of  this  State.  With  these  aids  I  pledge 
myself  to  show,  that  not  one  of  the  powers 
specifically  claimed  by  *A  stockholder'  for 
the  company  is  found  in  their  charter, — 
that  if  such  latent  and  dormant  powers  be 
exercised,  it  is  in  violation  of  the  charter 
and  of  the  laws  of  this  State;  and  that  the 
advertisement  of  the  company  bears  on  its 
face  statements  calculated  to  mislead  the 
publick. 

"  (Signed)      Amos.' 


»f 


Notwithstanding  this  and  like  disputes,  and 
denials    of    the    consistency    with    which    the 


46        Story  of  Trust  Companies 

Farmers'  managers  had  adhered  to  original 
charter  provisions,  the  appeals  to  the  "pubHck" 
and  the  attacks  upon  the  monopolists  of  the 
"  democratick "  party  came  shortly  to  an  end, 
and  in  1836,  on  April  30th,  the  Company  ob- 
tained its  new  charter  and  by  virtue  thereof 
assumed  as  its  new  title  "The  Farmers'  Loan 
&  Trust  Company." 

The  business  was  continued  in  Wall  Street 
the  capital  was  increased  to  two  million  dollars 
and  was  constantly  advertised  during  the 
summer  and  fall  of  the  year  named  as  being 
"the  largest  of  any  similar  institution  in  this 
State"  and  as  "principally  invested  In  bond 
and  mortgage  of  real  estate."  The  President 
of  the  reorganized  institution  was  Henry 
Seymour;  and  its  function  of  insuring  fire  risks 
now  disappeared;  an  Actuary  and  a  Physician 
were  named  upon  the  ofificial  list,  and  some 
life  insurance  business  was  transacted. 

As  a  matter  of  fact  the  only  curtailment  of 
powers  under  the  new  charter  was  a  provision 
whereby  the  Company  was  no  longer  permitted 
to  engage  in  the  business  of  fire  risks.  But 
life  policies  were  written  in   the  early  years 


LIFE    INSURANCE. 

TO  THOSE  WHO,  IN  THE  EVENT  OF  THEIR  DEATH,  WOULD  MAKE 
PROVISION  FOR  THE  SUPPORT  OF  THEIR  FAMILIES. 


FARMERS'  LOAN  AND  TRUST  COMPANY, 

or  the  City  of  IVew-York, 
-WITH  A  CAPITAI.  or  2,000,000  Z>OU:.ARS, 

IS  ENGAGED,  INDEPENfcENT  OF   ITS  OTHER  BUSINESS, 
I.N   THAT  OF 

The  objects  and  benefits  of  which  are,  to  afford  mutual  relief  and 
maintenance  to  the  widows,  children,  or  iriends  of  deceased  in- 
dividuals, and  to  all  who  ar.3,  or  may  be,  dependant  upon  the 
lives  of  others  for  a  support. 

This  Company  will  insure  in  sums  not  less  than  SlOO,  nor 
exceeding  ^5,000,  and  for  ony  term,  whether  it  be  for  one  or 
more  years,  or  for  the  duration  of  life ;  the  prcmiuni  to  be  paid 
to  tTie  Company,  depending  upon  the  term  and  tlie  age  of  the 
party  insured.     For  example  ;  — 

A  person  aged  thirty  years,  v^ishing  to  secure  to  his  wife  or 
family,  or  friend,  or  any  other  person,  a  certain  sum  of  money, 
to  be  paid  them  after  his  death,  say  a  sum  of  $100,  may  do  so  by 
paying  to  the  Company  a  premium  of  $2^^  every  year  during 
his  life.  Should  he  die  immediately  after  effecting  the  insurance, 
the  Company  would  pay  the  amount  insured. 

Should  the  party  wish  the  insurance  to  continue  for  a  term  of 
years  only,  say  for  seven  years,  the  annual  premium  would 
only  be  .'sl,?i. 

Should  the  term  be  for  one  year,  tlie  premium  would  be  $1^- 

Should  the  age  be  less  than  thirty  years,  the  premium  would 
be  less;  if  over  thirty  years,  the  premium  would  be  greater. 

An  individual  may  also  insure  the  life  of  another  person,  pro- 
vided he  has  an  interest  in  that  life  to  the  amount  insured  :  by 
which  means  a  debt  or  any  sum  of  money  dependant  upon  the 
life  of  the  insured  may  be  secured. 

Life  insurance,  in  addition  to  the  benefits  derived  from  those  ex- 
cellent institutions.  Savings  Banks,  is  another  and  more  effectual 
method  of  providing  for  the  future  welfare  of  relatives  and  friends: 
the  advantages  to  be  derived  from  it  are  attained  with  ease  and 
certainty,  and  at  a  trifling  cost. 


Money  is  also  received  by  this  Company  in  deposite,  in  trust, 
for  any  period  over  thirty  days,  and  mterest  allowed  on  the  same. 

Office  of  the  Company,         )         R.  K.  DELAFIELD, 

No.  34  Wall  Strekt,  }  Artniary  and  Secretary. 

New  York.  \ 

Circular  issued  about  1836,  describing  Benefits  of 
Life  Insurance. 


An  Early  Insurance  Policy        47 

following  1836,  and  one  of  the  oldest  of  these, 
v/hich  was  also  the  last  to  be  surrendered  and 
its  amount  paid  to  beneficiaries,  hangs  to-day 
in  a  frame  on  the  wall  of  the  Directors*  Room. 
It  bears  date,  "Thursday  the  15th  day  of 
February,  1838."  In  the  application  which 
forms  a  part  of  the  policy  it  was  stated  that 
the  "sum  to  be  assured  is  $2000."  Among 
questions  and  answers  incident  to  the  work  of 
the  medical  examiner  was  set  forth  the  printed 
query:  "Has  the  party  had  the  gout?"  with  the 
response  written  in:  "He  has  not";  again, 
"Has  the  party  had  the  smallpox?"  the  answer 
being:  "He  has  not";  but  to  the  query,  "Has 
the  party  had  the  cowpox?"  the  reply  was,  "He 
has." 

The  assured  lived  to  be  over  ninety  years  of 
age,  and  paid  his  semi-annual  premiums  until 
a  few  years  ago  when,  upon  proofs  of  his  death 
furnished  the  Company,  a  remittance  was  made 
to  his  heirs  of  two  thousand  dollars  in  full 
settlement  of  the  above  described  contract. 

During  the  same  spring  of  1836  two  notable 
events  occurred  in  Philadelphia  trust  company 
history.     On    February    25th    the    charter    of 


48        Story  of  Trust  Companies 

The  Pennsylvania  Company  for  Insurances  on 
Lives  and  Granting  Annuities  was  supplemented 
by  a  grant  of  authority  to  enter  into  the  busi- 
ness of  executing  trusts.  Plans  for  this  enlarge- 
ment had  been  in  contemplation  as  far  back  as 
1 83 1,  and  Harrison  S.  Morris  in  his  admirable 
Sketch  of  the  Pennsylvania  Company  relates  that 
the  directors  had  regard  to  "the  great  success 
of  what  in  India  at  this  time  were  called  agency 
houses, — concerns  organized  to  transact  busi- 
ness for  trustees  or  individuals,  to  receive 
moneys  on  deposit,  and  to  administer  estates." 
His  narrative  shows  that  a  committee  early 
in  1 83 1  reported  favorably  upon  the  plan  of 
engaging  in  the  new  form  of  business,  and  that 
the  Board  of  Directors  had  on  January  nth 
resolved  "to  enter  into  the  business  of  trusts," 
directing  "that  the  President,  in  conjunction 
with  Horace  Binney,  John  Sergeant,  and  C.  S. 
Miller,  be  requested  to  prepare  the  forms  of 
documents  that  may  be  required  for  conducting 
the  business." 

But,  as  explained  by  Mr.  Morris — 

"it  was  not  the  fashion  of  our  grandfathers 


Re-incorporation  of  "Pennsylvania"  49 

to  enter  upon  an  untrodden  field  even  after 
so  much  deliberation  as  this.  There  seems 
to  have  been  cause  for  hesitation  and  delay. 
Perhaps,  as  has  been  suggested,  there  were 
rumors  of  financial  trouble  among  the 
parent  concerns  in  India;  or,  more  likely  still, 
as  is  indicated  by  the  subsequent  action  of 
the  Board,  the  right  of  the  Company  to 
embark  in  the  new  order  of  business  without 
enlarged  powers  from  the  Legislature  was, 
in  spite  of  exalted  legal  advice,  held  in  doubt ; 
for,  at  an  adjourned  meeting  of  the  Board, 
held  on  November  3,  1832,  the  promising 
ventin"e  was,  for  the  time,  put  off  by  a  resolu- 
tion to  the  effect  'that  it  is  inexpedient  for 
the  Company  to  go  into  the  trust  business, 
and  that  the  subject  be  indefinitely  post- 
poned.'" 

However,  the  needful  plans  were  consum- 
mated by  the  later  date  already  mentioned, 
and  the  new  undertaking  proceeded  under  the 
Presidency  of  Thomas  Astley.  At  this  time 
the  Company  was  lodged  in  a  dwelling  house 
at  No.  72,  now  138,  South  Third  Street.  From 
1837  to  1857,  Hyman  Gratz  served  as  President, 
the  Company  removing  in  May,  1840,  to  Wal- 
nut Street  above  Third — then  No.  66,  now  304. 
4 


50        Story  of  Trust  Companies 

These  premises  had  been  occupied  by  the 
Philadelphia  Saving  Fund  Society  and  the 
Pennsylvania  Company's  lease  was  originally 
for  ten  years  at  an  annual  rental  of  twelve 
hundred  dollars. 

The  second  Philadelphia  company  to  engage 
in  trust  business  was  also  granted  its  charter 
by  the  Pennsylvania  Legislatiire  of  1836.  It, 
like  the  two  institutions  in  New  York,  and  its 
contemporary  in  Philadelphia,  began  opera- 
tions in  the  insurance  field,  and  like  them  sub- 
ordinated, at  least  in  the  form  of  its  corporate 
title,  the  new  and  undeveloped  idea  of  trust 
business.  This  institution  was  incorporated 
under  an  act  approved  March  17,  1836,  as 
The  Girard  Life  Insurance,  Annuity  and  Trust 
Company  of  Philadelphia.  On  May  19th  of 
the  previous  year  some  Philadelphia  citizens 
who  had  been  members  of  the  Girard  Savings 
Association,  held  a  meeting  at  which  it  was 
voted  to  amend  the  corporate  title  to  the  Girard 
Beneficial  Association.  Toward  the  end  of 
the  year  the  managers,  seemingly  with  an 
eye  upon  experiments  being  tried  in  other 
directions,  decided  to  enlarge  the  scope  of  this 


Incorporation  of  the  Girard        51 

association's  business  by  the  addition  of  a 
department  to  be  devoted  to  life  insurance 
operations.  The  Legislature  was  memorialized 
with  the  result  above  described.  On  March 
26th  an  organization  meeting  of  the  managers 
was  held  at  which  Benjamin  W.  Richards  was 
chosen  President.  The  Company's  first  office 
was  in  rented  quarters  on  the  first  floor  of  No. 
159  Chestnut  Street  (old  number),  the  upper 
portion  of  the  building  being  occupied  as  a 
dwelling.  The  amount  of  capital  subscribed 
was  $300,000,  payable  in  instalments  spread 
over  a  two-year  period  and  the  charter  conveyed 
a  privilege  within  two  years  of  the  incorpora- 
tion to  increase  the  stock  to  $500,000.  This 
increase  was  effected  in  1838,  but  the  addi- 
tional funds  were  apparently  not  needed  and 
the  stock  was  repurchased  later,  although  the 
Company's  books  continued  to  show  nominal 
capital  of  $500,000,  with  $300,000  paid  in, 
until  1856,  when  authority  was  given  for  can- 
celing the  $200,000  of  excess  capital,  as  recorded 
on  the  general  ledger.  The  Company's  cor- 
porate powers  were  those  of  the  other  early 
trust  companies  and  it  appears  to  have  been 


52        Story  of  Trust  Companies 

the  first  concern  to  do  a  business  of  receiving 
money  on  deposit  "subject  to  cheque  or  on 
time."  The  official  and  clerical  force  of  the 
Company  at  the  time  of  its  inception  was  made 
up  of  four  members,  these  being  a  president, 
treasurer,  actuary,  and  runner.  The  President, 
Mr.  Richards,  remained  as  the  Company's  head 
until  his  death  in  July,  1851,  and  with  his  as- 
sociates witnessed  many  stirring  events  both 
before  and  during  the  panic  days  of  1837. 
Something  of  the  current  scope  of  banking 
affairs  and  some  of  the  ill  effects  of  over-develop- 
ment on  the  part  of  trust  company  promoters 
will  next  be  described. 


CHAPTER  IV 

BANKING  DEVELOPMENTS.       OHIO    LIFE    INSUR- 
ANCE &  TRUST  COMPANY.       PANIC  OF  1 837 

In  1837,  just  before  the  outbreak  of  the  great 
panic  of  that  year,  Levi  Woodbury,  Secretary 
of  the  Treasury,  made  a  special  report  to  the 
House  of  Representatives  at  Washington  on 
the  subject  of  the  number,  capital,  and  "de- 
posites"  of  banks  throughout  the  country. 
Some  of  his  figures  were  admittedly  based 
upon  incomplete  returns  from  certain  States, 
and  there  would  seem  to  be  some  inaccuracies, 
particularly  in  the  light  of  statistics  prepared 
forty  years  later  and  published  in  the  annual 
report  of  Comptroller  of  the  Currency,  John 
J.  Knox,  in  1876.  But  by  combining  both  sets 
of  figures,  and  including  as  deposits  the  amounts 
due  to  banks,  the  aggregates  for  1835  are  found 
to  have  been : 

53 


54        Story  of  Trust  Companies 


Number  of 

STATE 

(in  order  of  size) 

batiks  (includ- 
ing branches, 
mostly  in  tJie 
Southern 
States) 

Capital 

Deposits 

(including 
due  tj  banks) 

New  York 

86 

$31,581,460 

$36,640,526 

Massachusetts 

105 

30,410,000 

16,411,799 

Louisiana 

41 

26,422,145 

11,104,295 

Pennsylvania 

43 

17,958,444 

12,767,453 

Maryland 

14 

7,542,639 

5,268,746 

Rhode  Island 

61 

8,75o.5«i 

1,888,575 

Ohio 

29 

6,390,741 

2,758,007 

Virginia 

5 

5,840,000 

3,265,964 

Connecticut 

31 

7,350,766 

1,282,703 

Mississippi 

10 

5,890,162 

2,569,749 

Georgia 

23 

6,783,308 

1,514,501 

Alabama ' 

5 

5,607,623 

2,256,504 

Kentucky 

9 

4,898,685 

2,265,387 

Maine 

36 

3,785,000 

1,651,224 

New  Jersey 

24 

3,970,090 

1,139,827 

District  of  Columbia 

7 

2,613,985 

1,463,299 

South  Carolina 

4 

2,288,030 

1,600,956 

Tennessee 

7 

2,890,381 

783,797 

North  Carolina 

4 

2,464,925 

867,015 

New  Hampshire 

26 

2,655,008 

441,189 

Michigan 

7 

658,980 

702,179 

Delaware 

3 

730,000 

500,848 

Vermont 

17 

921,815 

182,874 

Indiana 

I 

800,000 

131,221 

Missouri 

1 

Branch 

582,125 

Illinois 

2 

278,739 

129,434 

Florida 

2 
603 

114,320 

73,656 

189,597,827 

110,243,853 

Add  Bank  of  United 

States 

I 

604 

35,000,000 

16,322,129 

Total  for  Country 

$224,597,827 

$126,565,982 

Banking  Totals  of  1835  55 

These  two  money  totals  are  exclusive  of 
some  123  odd  millions  of  dollars  of  outstanding 
circulating  notes  and  miscellaneous  liabilities. 
The  aggregate  liabilities  of  the  country's  banks 
appear,  therefore,  to  have  been  a  matter  of 
something  less  than  475  millions  of  dollars,  on 
or  about  January  i,  1835. 

The  significance,  or  rather  insignificance,  of 
these  early  aggregates  of  capital,  deposits  and 
circulation  as  contrasted  with  those  of  to-day 
will  be  made  apparent  in  later  chapters,  but, 
in  passing,  the  reader  should  have  in  mind  one 
marked  aspect  of  the  foregoing  totals.  Our 
ancestors  of  eighty  odd  years  ago  conducted 
their  banks  with  contributions  to  capital  equal 
to  nearly  double  the  volume  of  deposits;  while 
to-day  twenty-seven  thousand  odd  banks, 
private  bankers,  and  trust  companies,  combined, 
throughout  the  country,  with  about  twenty- 
six  billions  of  dollars  of  total  resources  and 
liabilities,  have  approximately  seventeen  per 
cent,  of  capital  and  undivided  profits  against 
eighty-three  per  cent,  of  other  liabilities.  Also, 
we  may  take  just  a  moment  to  grasp  an  amazing 
fact,  before  which  even  modern  minds,  accus- 


56        Story  of  Trust  Companies 

tomed  to  big  things,  must  marvel.  The  un- 
dreamed of  result  accomplished  since  the  days 
of  1835,  when  America's  banking  wealth  aggre- 
gated less  than  five  hundred  millions  of  dollars, 
is  that  the  total  has  gone  through  a  doubling 
and  redoubling  process  nearly  six  times  over; 
that  the  ratio  of  191 6  to  1835  is  as  50  to  i ;  that 
to-day  a  single  New  York  bank,  the  National 
City,  shows  615  millions  of  dollars  of  total 
resources,  and  a  single  New  York  trust  com- 
pany, the  Guaranty,  is  not  far  behind  with 
520  millions. 

Next  and  before  returning  to  the  subject  of 
trust  company  developments,  a  little  picture 
is  to  be  drawn  of  the  New  York  State  banks 
of  the  period.  The  eighty-six  banks  mentioned 
in  the  preceding  tabulation  had  numbered 
four  years  earlier,  in  1831,  only  forty-nine. 
Of  these,  thirty-four  were  up-state  institutions 
and  fifteen  were  in  what  is  now  New  York  City, 
including  the  Bank  of  Long  Island.  The 
State  Banking  Commissioners  in  their  first 
report,  as  of  January  i,  1831,  showed  the  capital 
of  these  fifteen  metropolitan  banks  to  be 
$14,301,200.     This  sum  did  not  include,  how- 


Condition  of  New  York  City  Banks  57 

ever,  any  part  of  the  capital  of  the  Bank  of  the 
United  States,  with  its  three  branches  in  New 
York  City,  The  commissioners  showed  in  this 
report  the  amount  of  each  bank's  stock  owned 
by  non-residents  of  the  State,  the  quantity  of 
bank  notes  in  circulation,  of  specie  on  hand, 
of  directors'  liability,  and  of  stock  owned  by 
the  directors.  But  the  report  was  silent  on  the 
question  of  other  assets  and  liabilities;  in  fact, 
the  explanation  was  made  that  "a  statement 
of  assets  and  deposits  is  not  shown  because 
publicity  might  be  the  cause  of  affecting  the 
comparative  reputation  of  some  injuriously." 
Practically  all  of  the  banks  were  paying  divi- 
dends at  this  time  ranging  from  2  to  8  per 
cent,  per  annum,  and  the  Mechanics  Bank, 
after  twenty  years  of  operations,  was  disburs- 
ing as  much  as  $140,000  a  year,  being  7  per 
cent,  on  its  $2,000,000  of  capital.  Five  years 
later,  in  1836,  this  institution's  balance  sheet 
was  the  largest  in  New  York,  showing  footings 
of  $9,035,500.  On  the  other  hand,  the  City 
Bank  showed  total  resources  of  only  $2,571,844. 
Its  capital  was  $720,000;  its  undivided  profits 
$160,805;  its  circulation  $345,659;  its   "depo- 


58        Story  of  Trust  Companies 

sites"  $498,799;  during  1835,  it  had  paid 
$50,400  in  dividends,  7  per  cent,  on  its  capital. 

New  York's  two  trust  companies,  the  old 
Farmers  Fire  and  the  N.  Y.  Life  Insurance 
&  Trust,  had  a  western  rival  fully  two  years 
before  the  two  Philadelphia  companies,  as 
already  described,  acquired  trust  powers.  This 
was  a  Cincinnati  concern,  of  ample  proportions 
but  destined  less  than  a  quarter  of  a  century 
afterward  to  come  to  an  unfortunate  ending. 
Its  title  was  The  Ohio  Life  Insurance  &  Trust 
Company,  and  it  was  granted  a  perpetual 
charter  on  February  12,  1834,  with  authority 
to  issue  $2,000,000  of  capital.  It  had  permis- 
sion to  issue  notes,  until  1843,  "for  not  more 
than  twice  the  amounts  of  deposits  allowed  to 
remain  for  not  less  than  a  year,  and  for  not 
more  than  half  the  paid-up  capital  invested  in 
loans  on  real  estate";  the  charter  was  to  be 
forfeited  if  it  should  suspend  for  more  than 
thirty  days.  Its  first  President  was  Micajah 
T.  Williams. 

Four  years  after  the  Company  was  organized, 
a  voluminous  report  was  issued  showing  that 
there  were  nine  trustees  in  Cincinnati,  two  in 


An  Ohio  Company  59 

Columbus,  one  in  Dayton,  two  in  New  York, 
one  in  Boston,  one  in  Philadelphia,  and  one  in 
New  Orleans.  The  Company's  banking  de- 
partment loans  amounted  to  $1,123,780.21.  It 
had  notes  in  circulation  in  the  sum  of  $433,765, 
and  owned  $5,000,000  of  stock  of  the  State  of 
Ohio,  redeemable  in  1856  and  i860  and  bearing 
6  per  cent,  interest. 

That  the  Company  inclined  more  to  banking 
than  insurance  business  was  revealed  by  the 
statement  that  the  Company  had  received 
nothing  upon  the  sale  of  annuities.  Its  life 
insurance  premiums,  covering  only  twenty 
lives,  had  amounted  during  the  four  years  to 
only  $4921.75.  But  that  trust  company  func- 
tions were  either  not  yet  understood  or  else 
not  particularly  exploited,  would  seem  to  be 
indicated  by  a  brief  admission  contained  in  the 
report  that  "nothing  had  been  received  in  trust 
to  be  invested  at  the  risk  of  the  depositor," 
and  that  "the  Company  is  not  liable  for  any 
amount  as  receiver." 

The  Company  had  a  branch  office  in  New 
York  by  1839.  This  was  opened  at  No.  62 
Wall  Street  and  the  location  changed  frequently 


6o        Story  of  Trust  Companies 

during  the  next  eighteen  years  which  preceded 
the  Company's  suspension. 

In  1835,  the  Southern  Life  Insurance  &  Trust 
Company  was  chartered.  It  claimed  privileges 
of  the  most  extensive  and  diversified  character. 
Shortly  afterward  it  was  described  in  Sumner's 
History  of  Baftking,  as  follows: 

"Its  capital  is  $2,000,000.00,  with  the 
privilege  of  increasing  it  to  $4,000,000.00. 
It  is  directed  to  report  to  the  Court  of 
Appeals  annually,  which  report  is  made  to 
Council.  No  such  report  has  ever  been 
made,  or  any  other.  The  capital  stock  of 
said  bank  is  to  be  taxed  at  the  same  rate  as 
all  other  personal  property  of  the  Territory, 
but  the  tax  is  not  to  exceed  $5,000.00.  The 
Territorial  guaranty  is  to  be  given  on  the 
bonds  of  the  corporation  under  certain  con- 
ditions. This  bank  claims  to  be  located  at 
St.  Augustine,  but,  it  is  said,  is  chiefly  con- 
ducted in  New  York,  and  has  an  agency  at 
Appalachicola." 

In  spite  of  the  mysteries  surrounding  this 
institution  it  seems  to  have  continued  in  busi- 
ness until  at  least  1839,  and  in  fact  did  have 


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A  Connecticut  Institution         6i 

an  agency  in  New  York,  at  No.  12  Wall  Street. 
Shortly  afterward  it  disappeared  from  the 
city  directory  and  is  to  be  remembered  no 
further  in  our  story. 

Connecticut  had  its  own  little  trust  insti- 
tution as  early  as  1837.  It  was  known  as 
the  Fairfield  Loan  &  Trust  Company,  and 
although  its  operations  were  of  short  duration, 
the  reader  may  be  interested  to  see  a  copy  of 
one  of  the  Company's  fifty-cent  currency  notes, 
as  reproduced  herewith.  This  interest-bearing 
obHgation  was  a  forerunner  of  the  "shinplas- 
ters"  soon  to  make  their  appearance  and 
serve  for  a  single  generation  in  substitution 
for  minor  coin  as  a  part  of  our  circulating 
media. 

For  several  years  preceding  1837  financial 
affairs  throughout  the  nation  had  been  greatly 
disarranged.  In  1832  President  Jackson  vetoed 
the  rechartering  of  the  Second  United  States 
Bank.  In  1836  the  Legislature  of  Pennsyl- 
vania granted  a  charter  to  the  United  States 
Bank  of  Pennsylvania  for  thirty  years.  Nicho- 
las Biddle,  the  President,  viewed  the  new 
charter   as  more   favorable  than  the   one  ori- 


62        Story  of  Trust  Companies 

ginally   obtained    from   Congress,    but   Horace 
White  relates  in  his  book,  Money  and  Banking: 

"An  enormous  bonus  was  paid,  or  pro- 
mised, to  the  State,  two  millions  in  cash,  and 
one  hundred  thousand  dollars  per  year  for 
twenty  years,  besides  various  subscriptions 
to  the  stock  of  railroads,  canals,  and  turn- 
pikes in  the  State.  Benton  said  that  every 
circumstance  of  its  enactment  betokened 
bribery  of  the  members  who  passed  it,  and 
an  attempt  to  bribe  the  people  by  distribut- 
ing the  bonus  among  them.  There  is  too 
much  reason  to  agree  with  him.  The  Gov- 
ernment was  still  a  shareholder  in  the 
Bank  to  the  par  value  of  $7,000,000  and 
there  was  some  trouble  in  getting  this  money 
out,  but  it  was  paid  in  four  annual  install- 
ments. 

"When  the  Bank  found  itself,  with  its 
enormous  capital,  rcs;tricted  to  Philadelphia 
and  the  neighboring  country,  it  gradually 
turned  itself  into  a  financial  company. 
Hitherto  it  had  confined  itself  to  the  banking 
business  as  strictly  as  banks  usually  do, 
discounting  commercial  paper,  buying  bills 
of  exchange,  and  dealing  in  coin  and  bullion. 
Now  it  advanced  money  largely  on  stocks. 


The  Panic  of  1837  63 

Before  March,  1836,  it  had  twenty  millions 
thus  invested.  The  country  was  now  in 
the  fever  of  speculation  which  culminated  in 
the  panic  of  1837." 

In  May  of  that  year  suspensions  occurred 
everywhere.  In  New  York  there  were  riots, 
and  placards  appeared  reading : 

NO  RAG  MONEY 
GIVE    GOLD    AND    SILVER 

DOWN  WITH  THE 
CHARTERED  MONOPOLIES 

During  the  year  eight  banks  failed  in  Massa- 
chusetts, nearly  all  in  Boston,  or  the  immediate 
neighborhood.  They  represented  capital  of 
about  four  million  dollars.  The  panic  con- 
tinued with  great  severity  until  the  resumption 
of  specie  payments,  which  occurred  in  New  York 
during  May,  1838.  The  banks  in  Pennsylvania 
and  the  Southern  States  resumed  in  August,  but 
again  suspended  a  month  later,  and  this  con- 
dition prevailed  during  many  months  thereafter, 
only  the  New  York  banks  continuing  to  deal 
on  a  basis  of  specie  payments  during  the  year 
1840.     Finally  in  1841,  following  suspensions 


64        Story  of  Trust  Companies 

by  the  Bank  of  the  United  States  in  1837  and 
1838,  there  was  a  third  and  complete  collapse 
of  that  institution,  but  shortly  afterwards 
financial  conditions  again  righted  themselves 
and  by  degrees  general  business  proceeded  on 
more  normal  lines. 

The  panic  of  1837  has  usually  been  regarded 
as  the  most  severe  depression  ever  experienced 
by  the  country,  unless  perhaps  the  greater 
scope  of  the  railroad  failures  of  1893  and  the 
banking  troubles  of  1907  may  be  said  to  have 
covered  wider  areas  of  commercial  and  financial 
distress.  Nevertheless,  it  appears  that  such 
few  trust  companies  as  were  then  doing  busi- 
ness in  New  York,  Philadelphia,  Cincinnati, 
and  the  South,  w^ere  not  in  a  single  instance 
driven  out  of  business  during  the  acuteness 
of  the  troubles  of  that  period. 

Toward  the  close  of  the  year  1837,  ^^i^  after 
some  little  recovery  had  been  made  from  the 
depression  of  the  summer  of  that  year,  an  in- 
teresting event  occurred  in  New  York  City. 
On  November  27th  there  was  convened,  in  the 
City  Hall,  the  first  banking  convention  of  im- 
portance  to   be    held    in    the    country.      This 


An  Early  Bankers'  Convention    65 

was  composed  of  142  delegates  representing 
nineteen  different  States.  One  of  these  came 
from  as  far  south  as  Georgia,  three  were  from 
Kentucky,  and  what  was  then  the  extreme  west 
was  represented  by  one  delegate  from  Indiana. 
The  purpose  of  this  gathering  was  to  take 
measures  looking  toward  an  early  resumption 
of  specie  payments.  William  Meredith,  Presi- 
dent of  the  Schuylkill  Bank  of  Philadelphia, 
acted  as  chairman.  Albert  Gallatin,  George 
Newbold,  and  Cornelius  Heyer  were  appointed 
a  committee  to  publish  the  views  of  the  con- 
vention. The  last  named  was  President  of  the 
Bank  of  New  York,  and  one  of  the  other  an- 
cients in  attendance  at  the  time  was  a  well- 
known  banker  of  the  period.  President  of  the 
Tradesmen's  Bank  and  one  of  the  incorpora- 
tors of  the  New  York  Life  Insurance  &  Trust 
Company,  by  name  Preserved  Fish! 


CHAPTER  V 

1838.       FREE     BANKING    ACT.        IRRESPONSIBLE 

COMPANIES    IN    NEW    YORK    AND    THE 

INTERIOR 

Financial  corporations  in  New  York  State, 
prior  to  1838,  consisted  of  branches  of  the  Bank 
of  the  United  States,  the  older  commercial  and 
savings  institutions  enjoying  special  charters, 
and  safety  fund  banks,  created  under  the  laws 
of  that  year,  together  with  the  trust  companies, 
as  heretofore  described.  The  plan  of  the  safety 
fund  banks  was  a  required  deposit  with  the 
State  equal  to  one-half  of  one  per  cent,  of  their 
capital  stock  during  each  of  six  years.  This 
3  per  cent,  of  the  capital  of  the  banks  consti- 
tuted a  fund  for  the  redemption  of  circulating 
notes  and  other  indebtedness  of  any  of  the 
banks  becoming  insolvent.  In  April,  1838, 
the  so-called  free  banking  system  was  estab- 
lished.     Its    methods    and    results    were    de- 

66 


Operations  of  Free  Banking  Act  67 

scribed  eleven  years  later  by  Millard  Fillmore, 
then  State  Comptroller,  in  the  following 
terms : 

"There  was  nothing  in  the  act  that  re- 
quired individual  bankers  to  deposit  any 
particular  amount  of  securities  before  they 
commenced  banking.  The  country  was  then 
flooded  with  stocks  from  almost  every  State 
and  the  consequence  was  that  numerous 
banks  sprang  into  existence  under  this  law. 
Repudiation  soon  followed,  many  States 
that  did  not  repudiate  failed  to  meet  their 
obligations,  confidence  was  impaired,  credit 
was  shaken,  and  stocks  generally  depreciated 
in  the  markets,  the  consequence  was  that 
many  banks  failed  and  the  Legislature  par- 
tially retrieved  its  error,  in  1840,  by  exclud- 
ing all  stocks  except  those  issued  by  this 
State,  and  required  those  to  be,  or  to  be 
made,  equal  to  a  five  per  cent,  stock. 

"Finding  the  small  banks  unsafe,  the 
Legislature  in  1844  required  individual  bank- 
ers to  deposit  securities  to  the  amoimt  of  at 
least  $50,000 ;  and  associations  to  the  amount 
of  $100,000  before  they  were  entitled  to  any 
notes  for  circulation.  The  stringency  of  the 
money    market    in    1847,    admonished    the 


68        Story  of  Trust  Companies 

Legislature  that  the  security  of  these  banks 
was  not  sufficient;  and  in  1848  they  required 
the  stocks  deposited  to  be  stocks  of  this 
State,  and  equal  to  six  per  cent,  stock;  and 
the  bonds  and  mortgages  to  bear  an  interest 
of  seven  per  cent,  per  annum,  and  that  they 
should  not  be  for  an  amount  exceeding  two- 
fifths  of  the  value  of  the  land  covered  by  the 
mortgage.  This  is  the  free  bank  system,  as 
it  now  stands,  and  it  takes  its  name  from  the 
fact  that  all  are  freely  permitted  to  embark 
in  it  who  comply  with  the  rules  prescribed. 
It  is  no  monopoly — no  exclusive  right  granted 
by  the  Legislature  to  a  favored  few,  but  it 
is  open  to  all  who  can  give  the  requisite 
security." 

In  an  earlier  State  Comptroller's  report, 
transmitted  to  the  Legislature  in  the  first  week 
of  January,  1839,  a  list  was  presented  of  fifty- 
three  banks  which  had  filed  certificates  at 
Albany  during  the  eight  and  one-half  months 
following  the  passage  of  the  Free  Banking  Act. 
Among  some  strange  old  figures  contained  in 
this  report  were  the  totals  of  property  values 
as  they  existed  at  the  time  in  New  York  County 
and  State.     These  were: 


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a 
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Group  of  New  York  Incorporations    69 

New  York  County  personal  property  $  67,297,241 

"        "          "        real  property  196,450,000 

"       "      State      personal  property  122,021,033 

"       "        "          real  property  498,430,054 


These  are  in  contrast  with  the  figures  for 
19 1 5,  which  show  the  four  aggregates  of  valua- 
tion at  637  milHons  of  dollars,  4778  millions  of 
dollars,  924  millions  of  dollars,  and  11,146 
millions  of  dollars,  respectively. 

Included  among  the  banks  then  reported 
upon  were  four  institutions  which,  in  line  with 
recent  practice,  had  chosen  to  include  the  word 
"trust"  in  their  title.  These  were  the  Erie 
Canal  Trust  &  Banking  Company  of  Buffalo, 
with  subscribed  capital  of  $200,000 ;  the  Ix)ck- 
port  Bank  &  Trust  Company,  capital  $500,000; 
the  United  States  Trust  &  Banking  Company, 
New  York  City,  capital  $1,000,000;  and  the 
North  American  Trust  &  Banking  Company, 
also  of  New  York,  capital  $2,000,000.  The 
duration  of  the  charters  of  these  concerns  ranged 
from  262  to  500  years,  and  the  report  showed, 
under  the  head  of  "To  what  amount  capital 
may  be  increased,"  that  while  the  Lockport 
institution  had  ambitions  later  to  expand  its 


70        Story  of  Trust  Companies 

capital  to  $2,000,000,  and  the  Buffalo  Company 
contemplated  an  increase  to  $10,000,000,  the 
two  metropolitan  concerns  proposed  at  some 
time  in  the  future,  near  or  remote,  to  issue 
shares  of  stock  up  to  $50,000,000,  in  each  case. 
These  were  of  the  number  of  what  were  known 
as  "free  money  banks."  Three  of  the  four 
concerns  above  named  ceased  to  do  business 
within  a  year  or  so  after  their  incorporation, 
as  did  the  City  Trust  &  Banking  Company  of 
New  York,  organized  in  1839.  A  concern 
known  as  the  Howard  Trust  &  Banking  Com- 
pany of  Troy  continued  from  1839  to  1844, 
and  only  the  little  LockiDort  concern  lasted 
until  1848,  when  it  too  disappeared  from  the 
circle  of  free,  too  free,  banking. 

During  1839,  and  several  succeeding  years, 
Wall  Street  experienced  a  sudden  invasion  of 
companies  organized  in  other  States,  mostly 
in  the  South.  The  title  "trust  company" 
was  apparently  regarded  as  a  fetching  bit  of 
enterprise.  Among  companies  having  branch 
offices  in  Wall  Street  during  1839  and  the  very 
early  forties  may  be  mentioned  the  Charleston 
(S.  C.)  Insurance  &  Trust  Company,  the  Ameri- 


A  Mobile  Company  71 

can  Life  Insurance  &  Trust  Company  (Balti- 
more), the  Alabama  Life  Insurance  &  Trust 
Company,  and  the  Georgia  Insurance  &  Trust 
Company,  These  concerns,  with  the  Southern 
Life  Insurance  &  Trust,  already  mentioned, 
all  disappeared  by  1843,  leaving  the  New  York 
City  field  open  once  more  to  the  Farmers' 
and  the  New  York  Life  Insurance  &  Trust. 

The  Alabama  Company  did,  however,  occupy 
a  place  in  Mobile's  financial  affairs  during 
twenty  odd  years  following  its  grant  of  trust 
powers  in  1836,  and  one  of  its  stock  certificates, 
part  of  an  original  million  of  dollars'  worth 
issued,  unofficially  transferred  many  years  after- 
ward to  the  ownership  of  the  author,  is  repro- 
duced herewith  in  commemoration  of  the  rise 
and  fall  of  one  sturdy  institution  the  glory  of 
which  departed  over  half  a  century  ago. 

Throughout  the  troubles  of  1837,  and  as  they 
extended  into  the  early  forties,  the  press  con- 
tinued to  give  out  warnings  against  inflation. 
Sometimes  these  took  the  form  of  editorial 
comment,  but  occasionally  the  constant  out- 
cropping of  new  banks  became  the  subject 
of  humorous  protestations.     An  amusing  illus- 


']2        Story  of  Trust  Companies 

tration  is  to  be  found  in  a  poem  which  appeared 
in  the  New  York  "New  Era,  pubHshed  at  the 
close  of  1840.  This  was  entitled  "The  Wall 
Street  Chorus."  Probably  its  author  was 
addressing  his  satires  not  only  against  the 
banks  but  in  the  direction  of  some  of  the  irre- 
sponsible trust  companies  then  opening  up 
branches  in  New  York;  at  any  rate  his  verses 
were  clever  enough  to  be  here  repeated : 

THE    WALL     STREET     CHORUS 

Give  me  a  Bank — a  paper  Bank, 
The  best  machine  for  saving  labor, 

For  who  would  toil  and  sweat  himself, 

When  there's  a  chance  to  sweat  his  neighbor? 

Away  now,  with  your  power  looms. 
Revolving  Jacks  and  spinning  Jennies; 

Contrivances  for  picking  wool 

Can't  match  the  Banks  for  picking  pennies. 

"Ex  nihil  nihil  fit, '^  was  once 

A  maxim  much  in  vogue  with  some; 

But  few  indeed  can  now  maintain 

That  "nothing  can  from  nothing  come." 

For  though  the  ancients  could  convert 
Their  gold  to  rags  (as  we  are  told), 


^nmmis.r- 


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Control  at  Albany  73 

Yet  we,  in  times  more  civilized, 

Can  make  from  rags  the  best  of  gold. 

All  hail,  then,  glorious  alchemy, 

That  can  from  nothing  something  make ! 

What  pity  things  created  thus, 

Their  primal  form  are  prone  to  take. 

So  let  us  have  a  Bank,  my  boys! 

A  fortune  thus  we  all  may  win; 
Like  lilies  of  the  valley  live. 

Who  "toil  not,  neither  do  they  spin!'* 

With  money  then,  all  debts  we'll  pay, 
And  should  our  credit  once  get  low, 

It  never  comes  amiss  to  say, 

"The  Government  has  made  it  so!" 

At  Albany  the  State  Comptroller  was  charged 
with  the  duty  of  supervising  the  affairs  of  the 
institutions  formed  under  the  Free  Banking 
Act  in  respect  of  holdings  of  securities  deposited 
against  issues  of  circulating  notes,  also  as 
custodian  of  their  blank  notes.  Reporting  at 
the  end  of  1840  upon  transactions  down  to 
December  i,  1839,  the  Comptroller  showed  a 
most  elaborate  table  of  notes  ordered  from  and 
delivered  by  him  down  to  that  date.  This 
contained  columns  with  an  analysis  of  so  many 


74-        Story  of  Trust  Companies 

I's,  2's,  3's,  5's,  lo's,  2o's,  50's,  lOo's,  500's,  and 
looo's.  As  to  specific  trust  company  affairs, 
his  report  showed  that  the  North  American 
Trust  &  Banking  Company  of  New  York  had 
$371)900  of  stocks  and  mortgages  on  deposit 
to  secure  circulation.  He  also  remarked  that 
the  securities  of  the  New  York  Trust  &  Banking 
Company  had  been  sold  for  sufficient  to  redeem 
all  of  its  circulating  notes  at  par. 

At  this  time  the  Bank  of  Commerce  towered 
above  all  the  other  seventy-five  banks  in  New 
York  in  point  of  capital,  which  was  $5,000,000, 
but  the  North  American  Trust  &  Banking 
Company  came  second  with  $2,000,000  of 
capital,  and  there  were  only  five  other  banking 
institutions  in  New  York  City  with  as  much  as 
$1,000,000  of  capital  each. 

In  1846  the  Ohio  Life  Insurance  &  Trust 
Company  was  permitted,  by  an  act  of  the 
Legislature,  to  become  either  an  independent 
bank  or  a  branch  of  the  Bank  of  the  State  of 
Ohio,  if  it  so  desired,  by  setting  off  banking 
capital  in  specie  of  not  less  than  $300,000  nor 
more  than  $500,000.  It  appears,  however,  not 
to  have  availed  itself  of  this  privilege,  for  the 


Bank  Supervision  75 

records  of  later  years  do  not  show  that  it  had 
become  one  of  some  thirty-seven  branches  of 
The  Bank  of  the  State.  Moreover,  by  this 
time  the  other  commercial  banks  in  Ohio  were 
only  seven  in  number. 

During  these  years,  and  until  1852,  New  York 
State  seemed  to  get  down  to  a  more  normal  and 
restricted  view  of  activities  in  the  new  field  of 
trust  business.  Within  the  four  years  from 
1849  to  1852,  inclusive,  the  city  directories  of 
New  York  mentioned  no  trust  company  except 
the  Farmers',  the  New  York  Life,  and  the 
branch  of  the  Ohio  Company. 

On  April  12,  1851,  the  office  of  Superintendent 
of  Banks  was  established  by  law  at  Albany,  but 
there  was  no  thought  at  the  time  of  placing 
the  trust  companies  under  his  control;  in  fact 
supervision  by  his  department  through  examina- 
tions was  not  begun  until  nearly  a  quarter  of  a 
century  later. 

About  this  time  an  up-state  institution  was 
granted  a  special  charter.  This  was  the 
Buffalo  Trust  Company  (in  no  way  connected 
with  the  present  corporation  of  that  name), 
incorporated  in  the  spring  of  1852.     It  con  tin- 


76        Story  of  Trust  Companies 

ued  in  business  until  1857,  and  seems  to  have 
been  a  sizable  institution,  but  not  firmly 
enough  grounded  to  withstand  the  shock  of  the 
panic  of  that  year. 

At  this  period,  1852,  Philadelphia  had  listed 
in  the  city  directory  sixteen  "banking  institu- 
tions," two  "savings  funds  societies,"  and 
eleven  concerns  denominated  "insurance  com- 
panies, lives,  and  annuities."  Of  these  last, 
three  were  trust  companies,  the  Pennsylvania, 
the  Girard,  and  a  company  known  as  the  Na- 
tional Safety  &  Trust  Company.  The  one 
last  named  had  been  chartered  in  1841.  It 
was  a  short-lived  company. 

After  the  North  American  Trust  &  Banking 
Company  of  New  York  failed,  the  receiver 
David  Leavitt,  was  confronted  with  many 
problems  arising  out  of  the  vagaries  of  manage- 
ment indulged  in  by  those  who  had  carried  on 
the  Company's  brief  business. 

In  1853  Htigation  was  instituted  in  the  New 
York  Supreme  Court  to  the  end  of  testing  this 
defunct  concern's  liability  under  certain  obliga- 
tions which  the  receiver  sought  to  evade. 
There  had  been,  back  in  1840,  an  issue  of  so- 


Litigation  in  1853  11 

called  "Million  and  First  Half  MilHon  of  Trust 
Mortgages."  These  had  been  given  for  the 
purpose  of  providing  the  Company  with  needful 
funds,  and  the  question  now  arose  as  to  whether 
they  were  valid  debts  or  whether  they  had  been 
issued  for  the  purpose  of  defrauding  the  public. 
Two  or  more  large  mortgages  had  been  given 
by  the  North  American  Company  and  a  lot  of 
1500  bonds  issued  as  well,  each  of  the  denomina- 
tion of  £250.  The  general  plan  of  issuing  the 
bonds  was  not  unlike  the  already  prevailing 
mode  of  securing  bond  issues  by  deeds  of  trust, 
and  when  the  case  was  argued  before  the  Court 
the  point  was  made  that  to  have  executed  1500 
distinct  mortgages  would  have  entailed  a  great 
deal  of  work ;  accordingly  the  larger  instruments 
had  been  made  to  run  in  favor  of  trustees  who, 
using  their  own  judgment,  might  offer  invest- 
ments on  a  participation  basis. 

In  support  of  the  allegation  that  the  mort- 
gages had  been  made  with  the  direct  intent 
to  defraud,  long  arguments  were  presented, 
challenging  the  authority  of  a  trust  company 
to  issue  bills  or  notes  maturing  at  a  future  date  ; 
the  statutes  of  May,  1840,  having  "prohibited 


78        Story  of  Trust  Companies 

every  banking  association  from  issuing  or 
circulating  any  bill  or  note  of  said  association, 
unless  made  payable  on  demand  and  without 
interest."  The  penalty  prescribed  for  a  viola- 
tion of  this  law  was  that  any  official  or  member 
should  be  subject  to  fine  and  imprisonment. 
A  technical  claim  was  set  up  that  the  bonds 
had  been  merely  stamped,  and  not  impressed 
by  wax  or  wafer,  and  so  were  not  sealed  instru- 
ments according  to  law,  but  post  bills  or  notes, 
therefore  unlawful,  and  consequently  that  the 
assignments  collateral  to  them  were  null  and 
void.  Part  of  the  controversy  hinged  upon 
the  question  as  to  whether  these  bonds,  each 
made  to  yield  the  equivalent  of  £250  payable 
in  seven  years  in  pounds  sterling,  at  a  London 
counting  house,  with  interest  coupons  attached, 
were  "  likely  to  be  imposed  upon,  or  received  by, 
or  circulated  among,  the  people  of  New  York 
as  money  or  currency,  and  whether  the  Legisla- 
ture intended  to  guard  the  circulating  medium 
of  the  British  nation  from  an  unsafe  infusion 
of  American  credits. 

It  was  shown,  on  the  other  hand,  that  in  1838 
the  Merchants'  Exchange  Company  had  raised 


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Remarkable  Bank  Growth        79 

$400,000  to  complete  their  building,  by  the 
creation  of  a  large  number  of  bonds  in  the  name 
of  one  person,  to  whom  a  mortgage  had  in  turn 
been  given.  The  legal  battle  over  these  ques- 
tions was  bitter  and  prolix.  Apparently  the 
Court  had  not  before  had  to  deal  with  problems 
involving  rights  under  corporate  mortgages 
securing  bonds,  but  the  decision  finally  reached 
was  that  no  fraud  had  been  intended  and  that 
the  bonds  were  valid  instruments. 

Throughout  the  country  the  growth  of  the 
state  banks  during  the  four  years  from  1850 
to  1854  '^^s  remarkable.  Twenty  years  later 
Federal  Comptroller  Knox  prepared  statistics 
showing  that  within  those  five  years  there  had 
been  gains  of  approximately  fifty  per  cent,  both 
in  the  number  of  these  institutions  and  in  their 
capitaHzation,  circulation,  and  deposits. 

The  actual  figures  were: 


Number  of  State  banks 
Capital  stock 
Circulating  notes 
Deposits,  including  due 
banks 


to 


1850 


824 
$217,317,211 
131,366,526 

146,304,046 


1854 


1208 
$301,376,071 
204,689,207 

238,510,906 


8o        Story  of  Trust  Companies 

Of  the  384  new  banks  established  during  this 
short  period  New  York  State  contributed  123. 

The  Bankers  Magazine  of  November,  1854^ 
devoted  considerable  space  to  the  subject  of 
trust  company  affairs.  It  showed  that  on 
July  31st  of  that  year  the  New  York  Life 
Insurance  &  Trust  Company  had  a  little  over 
$6,200,000  of  total  resources  and  liabilities, 
including  $1,000,000  of  capital  and  $422,000 
of  surplus.  The  United  States  Trust  Company 
on  the  same  date,  and  after  one  year  of  opera- 
tions, showed  $1,000,000  of  capital,  $480,000 
of  deposits,  and  $46,000  of  surplus. 

Not  unnaturally  the  writer  of  the  article 
seemed  to  find  it  wellnigh  impossible  to  sepa- 
rate the  two  theories  of  Hfe  insurance  and  trust 
company  business.     He  declared: 

"The  Mutual  Life  is  in  effect  and  sub- 
stantially so  a  trust  company  and  a  very 
important  trust  too.  It  embodies  the  savings 
of  at  least  7834  persons,  to  whom  (or  for 
whom)  policies  have  been  issued  and  are 
now  in  force,  of  which  6720  are  for  life,  946 
for  the  term  of  seven  years,  and  168  for  shorter 
periods." 


Editorial  Comment  in  1854       81 

He  remarked  also  that  it  had  long  been  a 
custom  for  executors,  administrators,  and  trus- 
tees to  invest  trust  funds  in  bank  stocks,  and 
that  this  in  the  course  of  time  had  come  to  be 
regarded  as  an  unsound  practice,  the  State  of 
Pennsylvania  having  in  1853  decreed  that  such 
investments  were  invalid  and  made  at  the 
personal  risk  of  such  trustees.  He  concluded 
his  observations  by  saying: 

"At  present  in  New  York  State  the  trustee 
can  only  protect  himself  from  risk  when  he 
invests  the  trust  funds  in  real  estate  or 
government  securities,  or  invests  by  order 
of  the  Court." 

This  was  a  period  in  which  little  substantial 
progress  was  made  in  the  way  of  sound  trust 
company  development.  Their  plans  and  ulti- 
mate purposes  were  not  very  clearly  defined  and 
fell  far  short  of  being  understood  by  the  public. 
It  would  seem  that  both  the  panic  of  1837  and 
the  subsequent  outcropping  of  irresponsible 
state  banks,  some  of  them  calling  themselves 
trust  companies,  must  have  discouraged  the 
more  conservative  class  of  business  people  from 


82        Story  of  Trust  Companies 

launching  new  enterprises  in  the  trust  company 
field,  at  least  on  a  scale,  or  in  any  instance 
having  a  personnel,  to  be  compared  with  the 
companies  founded  down  to  1836.  From  this 
year  onward,  during  the  seventeen  years  which 
elapsed  until  1853,  no  American  trust  company, 
of  those  we  know  to-day,  took  out  a  charter. 

In  1853,  the  same  year  in  which  the  New  York 
Clearing  House  was  formed,  a  new  company 
appeared  in  New  York  City,  the  first  to  bear 
a  title  without  an  indication  of  any  insurance 
functions  whatever.  This  was  the  United 
States  Trust  Company,  which  began  business 
at  No.  40  Wall  Street  during  the  early  summer 
of  that  year.  Some  of  its  first  efforts  and 
accomplishments  will  be  narrated  in  the  chapter 
which  follows. 


CHAPTER  VI 

1853.      UNITED      STATES      TRUST     COMPANY      OF 

NEW  YORK 

The  United  States  Trust  Company  of  New 
York  was  chartered  on  April  12,  1853.  Among 
its  incorporators  were  Peter  Cooper,  John  J. 
Phelps,  Erastus  Corning,  Shepherd  Knapp,  and 
Wilson  G.  Hunt.  The  charter  was  the  basis  of 
all  special  charters  of  a  similar  character  sub- 
sequently granted  in  New  York,  as  well  as  of 
the  general  law  for  the  incorporation  of  trust 
companies  which,  upon  its  adoption  thirty-four 
years  later,  terminated  the  plan  of  granting 
special  charters  to  New  York  trust  companies. 

The  first  office  was  located  at  No.  40  Wall 
Street  where  Joseph  Lawrence,  the  first  Presi- 
dent, was  elected  at  a  meeting  of  the  trustees 
held  June  14,  1853.  Mr.  Lawrence  held  office 
until  May,  1865,  when  on  account  of  failing 
health  he  became  obliged  to  surrender  his 
important  duties  and  was  succeeded  by  John 

83 


84        Story  of  Trust  Companies 

A.  Stewart,  whose  services  as  President   con- 
tinued for  nearly  forty  years  thereafter. 

Early  in  the  Company's  existence  a  contro- 
versy arose  involving  the  question  of  whether 
the  corporation,  in  its  capacity  as  receiver  for 
the  Knickerbocker  Savings  Institution,  was 
not  indirectly  conducting  a  banking  business. 
In  1854  the  Knickerbocker  had  made  a  small 
loan  on  some  bank  stock  which  was  questioned 
as  being  a  possible  violation  of  its  charter  or  of 
the  1853  savings  bank  law.  The  New  York 
State  Court  of  Appeals  decreed  that  the  insti- 
tution had  been  within  its  right,  the  law  being 
only  a  prohibition  against  the  loaning  of  saving 
institution  funds  on  mere  personal  securities, 
but  the  trust  company  found  itself  in  the  posi- 
tion of  being  challenged  as  to  its  right  to  con- 
duct a  banking  business  in  so  far  as  this  might 
be  required  in  the  course  of  administering  the 
receivership.  Finally  after  due  deliberation, 
the  same  Court  ruled  in  favor  of  the  trust  com- 
pany by  declaring: 

"The  duties  of  this  Company  are  prescribed 
by  the  second  section  of  its  charter  which  do 
not  include  banking  powers." 


Reporting  to  Supreme  Court     85 

Adding,  as  the  Court's  opinion: 

"The  charter  of  the  United  States  Trust 
Company  is  not  unconstitutional.  It  is  not 
a  corporation  created  for  banking  purposes 
within  the  meaning  of  Section  4  of  Article 
8  of  the  constitution." 

The  charter  of  the  Company  contained  a 
provision  (Section  20)  that: 

"The  Board  of  Trustees  shall  exhibit 
annually  to  the  Supreme  Court,  on  such  day 
as  said  Court  shall  appoint,  a  full  statement 
of  their  affairs,  in  such  form,  and  verified  in 
such  manner  as  the  Court  shall  direct.  The 
Court,  should  it  be  deemed  proper,  may  refer 
such  statement  to  a  referee,  with  direction 
to  make  a  full  and  thorough  investigation  into 
the  affairs  and  management  of  the  Company, 
and  to  report  his  opinion  in  relation  to  the 
abiHty  and  integrity  with  which  its  affairs 
are  conducted,  the  prudence  and  safety  of 
its  investments,  the  security  afforded  to  those 
by  whom  its  engagements  are  held,  and  the 
advantage  derived  by  the  public  from  its 
operations.  The  expenses  of  every  investiga- 
tion so  made  shall  be  defrayed  by  the  Com- 
pany in  such  sums  as  the  said  Court  shall 
certify  to  be  reasonable  and  just." 


86        Story  of  Trust  Companies 

Agreeably  to  the  foregoing,  annual  reports 
were  made  for  a  number  of  years  by  referees 
of  the  Supreme  Court.  Their  findings  were 
the  result  of  elaborate  examinations  and  some 
of  the  facts  and  circumstances  set  forth  in  the 
report  of  1855  are  sufficiently  of  interest  to  be 
here  related.  It  was  a  document  of  seventy- 
three  pages  and  showed  among  other  things 
that  there  had  been  260  original  subscribers 
to  the  stock  two  years  earlier,  of  which  number 
113  continued  to  hold  their  shares,  but  that  147 
had  sold  their  stock  and  that  the  Company  had 
never  made  any  loan  upon  security  consisting 
of  its  own  shares.  It  was  also  reported  that 
as  many  as  1343  shares  had  been  transferred 
during  the  year  1854. 

The  officers  of  the  Company  were  three  in 
number: 

Salary 
Joseph  Lawrence,  President  $5000  per  annum 

John  A.  Stewart,  Secretary  3000     "       " 

G.  P.  HiNMAN,  Bookkeeper  1200     "       " 

The  Referee  described  how  both  the  Presi- 
dent and  the  Secretary  were  each  required  to 
keep  a  record  book  showing  in  duplicate  the 


Precautions  in  Early  Management  87 

details  of   each    day's    business    transactions. 
He  said: 

"The  precautions  taken  by  the  Company 
bring  every  transfer  of  stock  under  the  im- 
mediate inspection  of  its  President,  and  the 
book  which  he  himself  keeps,  and  in  which 
he  enters  every  certificate  that  is  surren- 
dered, and  every  one  that  is  issued,  is  an 
additional  check  upon  his  subordinates,  and 
imposes  upon  him  primarily  the  responsibility 
for  any  error.  This  practice  is  a  wise  one, 
and  the  labor  being  voluntarily  assumed  by 
the  President,  shows  how  prudently  and 
cautiously  his  position  is  filled." 

But  he  offered  a  criticism  of  the  manner  in 
which  the  record  books  were  kept,  pointing 
out  that  as  they  related  to  cash  on  hand  at 
the  end  of  each  day  they  were  not  quite  in 
agreement.     This  criticism  went  on  to  relate: 

"The  disagreement  is  in  the  detail  trans- 
actions, wherein  money  actually  passes. 
Thus,  in  one  case  where  a  party  was  entitled 
to  draw  out  a  deposit  of  the  sum  of  |i6oo 
he  actually  drew  out  in  cash  only  $900  and 
took  a  certificate   of  trust  for  $700.     The 


88        Story  of  Trust  Companies 

payments-receivable  book  showed  the  whole 
transactions,  while  the  Secretary's  record 
book  showed  only  the  payment  of  the  $900. 
Thus  Section  4  says,  the  President  shall 
keep  a  'daily  record  of  all  monies  received,' 
etc.,  not  of  monies  paid  also.  Yet  the  very 
next  sentence  says,  'his  record  of  payments 
and  receipts  shall  be  compared  daily  with 
the  record  kept  by  the  Secretary.'  Why 
compare  it  with  the  record  kept  by  the  Secre- 
tary, unless  both  are  to  keep  a  record  of 
payments  as  well  as  receipts?  And  why  call 
it  '  his  record  of  payments, '  unless  he  is 
required  to  keep  something  more  than  a 
record  of  receipts?" 

However,  in  a  "Conclusion"  appended  to 
the  report  an  unqualified  bill  of  good  health  was 
offered,  in  the  following  words: 

"My  opinion  as  to  the  prudence  and  safety 
of  the  investments  of  the  Company,  the 
security  offered  to  its  dealers,  and  the  ad- 
vantages flowing  to  the  public  from  its  opera- 
tions is  already  manifest  from  the  foregoing 
pages,  and  I  have  but  to  add  in  conclusion 
that  the  prudence,  care,  ability,  and  integrity 
with  which  its  affairs  have  been  conducted  are 
eminently  deserving  the  public  confidence." 


An  Auction  Sale  of  Assets        89 

As  late  as  1856  it  seems  to  have  been  the 
practice  to  hold  public  sales  of  the  miscellane- 
ous assets  of  failed  financial  institutions.  An 
illustration  of  this  is  an  old  catalogue,  issued 
from  the  presses  of  William  C.  Bryant  &  Com- 
pany at  No.  41  Nassau  Street,  announcing  the 
offering  of  certain  property  covered  by 

A  List  of 

Overdrafts,   Judgments,   Notes 

and 

Balances  Due  on  Notes 

to   be   sold   by 

P.    R.    Wilkins,    Auctioneer, 

for 

The  United  States  Trust  Company  of  New  York 

Receiver  of  the  Knickerbocker  Bank 

In   the   City   of   New   York 

On  Monday,  October  2^],  1856, 

at   Twelve   O'clock, 

At  the  Merchants'  Exchange,  in  the  City  of 

New  York. 


90        Story  of  Trust  Companies 

In  this  pamphlet  long  schedules  of  overdrafts, 
judgments  and  notes  were  set  up,  and  as  to  the 
property  first  mentioned,  the  trust  company- 
was  particular  to  specify: 

"The  amounts  of  overdrafts  are  as  shown 
on  the  ledgers  of  the  bank  and  are  supposed 
to  be  correct,  but  are  sold  without  recourse 
to  the  Receiver." 

According  to  a  resolution  passed  in  the  State 
Senate  on  January  7,  1857,  the  several  trust 
companies  were  required  to  report  to  certain 
members  of  the  Legislature  "on  their  present 
condition  and  to  submit  a  summary  of  their 
transactions  during  the  year  1856."  The  re- 
port of  the  committee  stated  that  the  special 
charters  granted  to  these  institutions  conveyed 
great  powers,  and  that 

"it  has  always  been  the  policy  of  the  State  to 
keep  a  watchful  eye  upon  them  and  guard 
the  community  from  those  evils  and  losses 
which  could  result  from  improper  or  unwise 
use  of  the  power  conveyed.  The  reports 
herein  made  show  that  the  confidence  of  the 
State  of  New  York  has  not  been  misplaced, 
but  that   those   institutions   arc  prosecuting 


An  1857  Statement  91 

a  prudent  and  successful  business,  beneficial 
to  the  community  at  large,  and  profitable  to 
the  stockholders  concerned." 

Included  among  the  figures  presented  was 
a  "summary"  of  trust  companj^  deposits,  on 
January  i,  1857,  as  subjoined: 

United  States  Trust  Company  of  New  York  $1,614,450.73 
New  York  Life  Insurance  &  Trust  Company  3,833,317.61 
Buffalo  Trust  Company  185,738.23 

Total  $5,633,506.57 

These  three  companies  had  1837  depositors, 
the  average  balance  of  each  depositor  being 
$3066.68. 

This  Legislative  Committee  appears  to  have 
given  considerable  attention  to  the  affairs  of 
the  three  companies  shown  above,  but  for  some 
reason  entirely  overlooked  the  duty  of  reporting 
upon  the  Farmers'  Loan  &  Trust  Company, 
or  upon  any  of  its  activities,  although  it  was  a 
fully  qualified  institution  which  had  been 
engaged  in  the  same  line  of  business  no  less 
than  thirty-five  years  previous  to  the  making 
of  the  report. 

As  illustrating  a  later  and  most  interesting 


92        Story  of  Trust  Companies 

appointment  of  a  trust  company  to  act  as 
trustee  on  behalf  of  a  great  benevolent  society, 
something  may  here  be  interpolated  regarding 
the  American  Bible  Society  and  the  United 
States  Trust  Company.  For  many  years  pre- 
vious to  1 9 10  the  Society  had  managed  for 
itself  some  millions  of  dollars'  worth  of  property 
acquired  under  the  wills  of  individuals,  which 
provided  that  the  income  should  be  devoted  to 
the  purposes  of  the  Society.  In  that  year,  by 
resolution  of  the  Board  of  Managers  of  the  So- 
ciety, the  securities  representing  these  trusts  were 
turned  over  to  the  United  States  Trust  Com- 
pany, and  that  Company  was  also  appointed 
Assistant  Treasurer  of  the  Society.  When  the 
change  was  made  it  was  in  recognition  of  the 
fact  that  although  the  Society,  by  virtue  of  its 
charter,  was  perpetual,  the  safeguarding  and 
administering  of  its  possessions  might  well  be 
left  to  the  discretion  of  a  financial  body  skilled 
in  the  intricacies  of  modern  investment.  The 
trust  thus  established  was  of  rather  a  different 
character  from  those  created  in  the  ordinary 
routine  of  corporate  and  individual  business 
transactions.     It  might  be  properly  said  that 


American  Bible  Society  Trusteeship  93 

it  was  a  trust  affecting  far  more  than  the 
material  side  of  human  life. 

The  American  Bible  Society  is  in  this  year, 
1 91 6,  celebrating  the  one  hundredth  anniver- 
sary of  its  founding.  A  century  of  good  works 
is  behind  this  organization,  which  has  for  its 
object  "the  encouragement  of  a  wider  circula- 
tion of  the  Holy  Scriptures  without  note  or 
comment."  Since  those  early  beginnings  the 
activities  of  the  Society  have  been  felt  at  the 
uttermost  ends  of  the  earth,  as  well  as  at  home, 
and  the  Scriptures  issued  since  then,  either  at 
the  Bible  House  in  New  York  City,  or  under 
the  Society's  supervision  in  foreign  lands,  have 
totaled  over  one  hundred  million  copies. 

Either  alone,  or  in  collaboration  with  others, 
this  organization  has  translated  the  Bible,  in 
whole  or  in  part,  into  not  less  than  one  hundred 
and  seventy-five  languages.  European  socie- 
ties have  translated  it  into  some  three  hundred 
more,  and  it  has  been  stated  that  "versions  are 
now  available  in  which  seven  out  of  every  ten 
human  beings  may  read  or  hear  at  least  the 
full  Gospel  narrative  in  the  words  of  Holy 
Scripture." 


94         Story  of  Trust  Companies 

Thus  is  to  be  had  a  glimpse  of  how,  in  the 
evolution  of  trust  company  affairs,  the  business 
side  of  one  of  our  largest  benevolent  under- 
takings has  come  to  have  its  part  in  a  sphere 
where  almost  every  dealing  is  on  the  side  of 
commerce,  finance,  or  other  interests  in  which 
the  prevailing  test  must  needs  be  material 
gain,  not  spiritual  advancement. 


CHAPTER  VII 

1857.      FAILURE  OF  THE  OHIO  LIFE.      FOUNDING 

OF  merchants'  loan  &  TRUST, 

CHICAGO 

Both  financial  and  political  historians  seem 
well  agreed  that  the  suspension  of  the  Ohio 
Life  Insurance  &  Trust  Company  on  August 
24,  1857,  was  the  first  bolt  to  fall  in  the  storm 
of  disaster  that  overtook  the  country  during 
that  memorable  panic  year. 

The  Company  had  not  been  altogether  pros- 
perous for  some  years.  In  1854  the  Cincinnati 
Commercial  had  taken  the  view  that  the  institu- 
tion was  being  "taxed  out  of  existence."  It 
described  the  law  of  two  years  earlier  which 
had  imposed  about  $100,000  burden  of  taxes 
on  $3,000,000  of  bond  and  mortgage  loans. 
Speaking  of  the  hardship  that  it  worked  upon 

the  Company,  this  newspaper  said: 

95 


96        Story  of  Trust  Companies 

"We  are  most  decidedly  in  favor  oi  free 
trade  i?i  money,  but  we  have  at  least  that 
amount  of  anxiety  for  the  public  welfare 
which  would  induce  us  to  prefer  to  spare  the 
lives  of  a  few  wicked  bankers,  rather  than 
to  involve  the  community  in  pecuniary  dis- 
tress, and  press  thousands  into  the  Golgotha 
of  bankruptcy." 

On  August  25,  1857  the  New  York  Tribune 
published  a  news  article  in  the  following  words : 

"The  Stock  market  was  very  active  to-day, 
the  aggregate  sales  in  and  out  of  the  Board 
exceeding  25,000  shares.  Some  parties  at 
the  First  Board  had  knowledge  of  the  impend- 
ing suspension  of  the  Ohio  Trust  Company 
and  sold  freely  on  the  anticipated  effect. 
After  the  suspension  was  made  public  the 
market,  as  will  be  seen  by  the  transactions 
of  the  Second  Board,  exhibited  a  quasi  panic, 
most  marked  in  Cleveland  and  Pittsburgh 
which  sold  down  to  20,  having  been  29  J^  on 
Saturday.  At  the  close  a  sale  was  made  at 
22.  The  decline  in  Pittsburgh  was  occasioned 
by  the  apprehension  that  the  Trust  Co. 
held  a  large  amount  of  the  stock  as  collateral, 
which  would  be  thrown  upon  the  market. 
.  .  .  The  announcement  between  the  boards 


Outbreak  of  Panic  in  1857        97 

that  the  Ohio  Life  Insurance  &  Trust  Com- 
pany had  been  obliged  to  suspend  payment 
threw  the  street  into  great  excitement  and 
it  became  at  once  the  engrossing  subject  of 
conversation.  The  magnitude  of  the  opera- 
tions of  this  institution  throughout  the  West 
renders  its  suspension  one  of  the  most  im- 
portant financial  events  since  the  Schuyler 
fraud,  and  fears  are  expressed  that  it  may 
produce  further  commercial  disasters.  The 
house  is  by  far  the  most  important  banking 
institution  in  Cincinnati,  and  the  locking  up, 
even  temporarily,  of  its  large  deposits  must 
prove  very  embarrassing  to  its  dealers  in 
that  city.  The  amount  of  its  liabilities  is 
not  stated,  but  they  are  estimated  at  from 
five  to  seven  millions.  The  annexed  card 
has  been  received  from  the  President: 

"  'Office  of  the  Ohio  Life  &  Trust  Co. 
New  York,  August  24,  1857. 


<(  <i 


'The  unpleasant  duty  has  devolved  upon 
me  to  state  that  this  Company  has  sus- 
pended payment.  This  event  has  been 
mainly  brought  about  in  consequence  of 
making  loans  in  this  city  to  parties  who  were 
unable  to  respond  at  this  time.  I  would  add 
that  the  capital  of  this  Company,  two  millions, 
is  sound  and  reliable,  exclusive  of  such  loss 


98        Story  of  Trust  Companies 

as  may  arise  from  the  insufficiency  of  securi- 
ties pledged  for  loans  above  referred  to. 

'"C.  Stetson,  President.'* 

"We  learn  that  about  seven  hundred 
thousand  dollars  of  checks  were  paid  out  by 
the  agency  here  on  Saturday  and  to-day 
were  unpaid.  The  checks  which  were  given 
to-day  were  again  received  by  the  Company 
and  the  drafts  for  which  they  were  paid  out 
were  given  up. 

"Messrs.  Brown  Bros.  &  Co.  and  others 
placed  an  attachment  upon  the  assets  of  the 
Company  here  as  a  foreign  corporation,  and 
the  Sheriff  and  his  deputies  are  in  charge  of 
the  office  and  property.  The  immediate  em- 
barrassment of  this  Company  arose,  we  under- 
stand, from  its  inability  to  meet  loans  made 
by  it  of  some  banking  houses  in  the  street. 
The  proceeds  of  these  loans  had  been  used 
in  sustaining  Western  Railroad  Companies, 
one  of  which  is  said  to  have  received  advances 
exceeding  half  a  million  of  dollars.  This 
Company,  although  in  its  title  a  life  insurance 
company,  issued  no  policies  on  Hves." 

On  the  next  day,  August  26th,  In  an  editorial 
In  the  same  newspaper  entitled  "Attack  on 
Excess  of  Luxuries,"  it  was  declared  that 


A  Brokerage  Failure  99 

"when  banking  concerns  like  the  Ohio  Life 
&  Trust  give  way  it  is  mere  idle  talk  to  pre- 
tend that  the  revulsion  is  fictitious  or  imagi- 
nary, and  go  on  railing  at  the  bears  and  the 
croakers,  as  has  been  the  silly  habit  of  some 
would-be  leaders  of  opinion  throughout  the 
months  past  in  wliich  this  storm  has  been 
probably  brewing." 

The  same  day  it  was  announced  that  John 
Thompson,  a  prominent  Wall  Street  broker  had 
been  unable  to  meet  his  liabilities  and  from  this 
time  on  the  panic  may  be  said  to  have  been 
fully  under  way. 

Conditions  at  the  home  office  of  the  Ohio 
Company  have  been  described  in  Greve's 
History  of  Cincinnati,  as  follows: 

"On  Wednesday,  August  26,  1857,  the 
Ohio  Life  Insurance  &  Trust  Company 
failed  to  open  its  doors.  Third  Street  be- 
came for  a  time  the  center  of  the  city  life. 
The  morning  papers  had  announced  that  the 
bank  would  not  open  and  this  drew  an  enor- 
mous crowd  to  this  point.  By  nine  o'clock 
it  was  impossible  to  pass  through  the  streets. 
The  crowd  lingered  all  day  long  and  the 
excitement    was    great.     Fortunately    there 


100       Story  of  Trust  Companies 

was  no  run  at  the  time  on  other  banks  of  the 
city.  It  was  felt  that  the  trust  company's 
misfortune  was  the  result  of  bad  management 
in  its  New  York  branch  and  there  was  every 
expectation  that  it  would  soon  reopen  its 
doors.  As  the  news  came  in  from  New  York 
during  the  day  it  became  apparent  that  the 
matter  was  more  serious  than  was  supposed. 
The  liabilities  of  the  company  were  estimated 
by  the  Tribune  at  from  five  to  seven  millions, 
and  the  assets  of  the  bank  to  the  extent  of 
two  millions  were  attached  by  foreign  credi- 
tors. It  soon  became  apparent  that  the 
stockholders  would  lose  everything.  This 
seemed  all  the  more  remarkable  as  the  stock 
had  sold  in  New  York  during  the  preceding 
week  almost  at  par  and,  but  a  few  days  before, 
the  directors  themselves  had  bought  a  num- 
ber of  shares.  The  local  branch  of  the  bank 
issued  a  statement  of  its  affairs  in  Cincinnati, 
claiming  to  show  assets  of  over  five  millions 
with  liabilities  of  less  than  three  millions, 
making  an  excess  of  assets  over  liabilities, 
exclusive  of  capital,  almost  two  millions  and 
a  half.  It  became  apparent  very  soon  that 
the  demoralization  in  financial  circles  was 
not  confined  to  any  one  institution.  The 
Central  Bank  of  Messrs.  Hatch  &  Langdon 
finally   suspended  payment,   to  be  followed 


Cincinnati's  Part  in  the  Panic    loi 

a  little  later  by  the  Citizens  (Smead,  Collard 
&  Hughes)  and  the  City  Bank.  All  these 
institutions  claimed  to  have  assets  largely 
in  excess  of  their  liabilities.  The  return  of 
the  investigating  committee,  composed  of 
W.  W.  Scarborough  and  Wm.  Hooper,  who 
had  been  sent  East  to  examine  into  the  affairs 
of  the  trust  company,  brought  little  consola- 
tion to  Cincinnati  financial  circles.  It  was 
perfectly  clear  that  the  company  was  a  wreck. 
The  hope  that  the  difficulties  would  be  tided 
over  very  soon  disappeared.  The  trust  com- 
pany checks  fell  to  25  cents  on  the  dollar 
and  the  market  generally  showed  great 
weakness.  In  October  came  the  general 
suspension  of  the  New  York  Bank,  followed 
quickly  by  suspension  throughout  the  country. 
The  Ohio  banks,  however,  fared  better  than 
most  of  the  banks  of  the  country,  and  although 
there  was  great  distress  as  a  result  of  the 
scarcity  of  money  and  a  panic  thoughout  the 
country,  there  were  no  further  failures.  It 
became  necessary,  however,  by  reason  of  the 
hard  times  to  distribute  food  to  the  poor 
citizens,  which  was  done  at  public  expense." 

During  the  closing  months  of  1857,  and  along 
in  1858,  disaster  overtook  the  banks  in  almost 


UNIVERSITY  OF  SOUTHERN  CALIFORNIA  LIBRARY 


102       Story  of  Trust  Companies 

every  quarter.  The  most  serious  breakdowns 
were  in  the  West.  The  Illinois  free  banks, 
having  no  real  capital  except  security  bonds 
in  the  hands  of  a  State  Auditor,  were  forced 
to  meet  a  rise  in  Eastern  exchange  of  no  less 
than  15  per  cent,  premium.  Lists  of  banks 
with  the  rates  at  which  their  notes  would 
be  received  in  trade  appeared  under  the  title 
of  "Bank  Note  Reporters."  These  were  dis- 
played in  the  stores  and  in  railroad  and  brokers* 
offices,  and  were  even  published  in  the  news- 
papers. There  were  lists  for  merchants,  bank- 
ers, railways,  and  the  values  of  circulating  notes 
changed  constantly  and  without  notice.  By 
i860,  banking  establishments  throughout  the 
entire  West  saw  their  assets,  securing  issues  of 
notes,  lodged  in  the  hands  of  public  officials, 
but  with  constant  and  serious  depreciation  in 
the  values  of  both  the  securities  and  the  notes. 
In  the  South  many  bank  failures  occurred  and 
the  distress  and  confusion  which  ensued  affected 
all  lines  of  business.  Specie  payments  were 
discontinued  in  New  York  from  October  14, 
until  December  14,  1857,  and  a  widespread 
unscttlemcnt    of    banking    affairs    existed    for 


Merchants'  Loan  &  Trust  Co.    103 

several  years  thereafter,  in  fact  until  the  passage 
of  the  National  Banking  Act  in  1863. 

In  spite  of  conditions  like  these  a  group  of 
Chicago  financial  men  saw  their  way  in  1857 
to  establish  there  an  institution  which  in  our 
times  is  recognized  as  being  the  oldest  American 
trust  company,  organized  as  such,  of  those 
doing  business  west  of  the  Atlantic  seaboard. 

This  was  The  Merchants'  Savings,  Loan  & 
Trust  Company,  which  featured  its  plan  of  a 
savings  department  in  the  original  title  but 
abandoned  the  idea  until  1902,  having  about 
twenty  years  previously  changed  its  corporate 
title  to  The  Merchants'  Loan  &  Trust  Company. 

Back  in  1857  the  original  capital  was  fixed 
at  $500,000,  with  liberty  to  increase  to $2,000,000 
under  a  term  of  life  of  fifty  years.  By  1907, 
the  Company's  fiftieth  anniversary,  its  capital 
had  become  $3,000,000.  Down  to  the  present 
there  never  has  been  a  consolidation,  nor  has  the 
business  of  any  other  company  been  absorbed. 

Intimate  details  of  the  early  history  of 
The  Merchants'  Loan  &  Trust  Company  are 
mainly  a  matter  of  tradition,  owing  to  the  dis- 
astrous ravages   of  the   great  Chicago  fire  of 


104      Story  of  Trust  Companies 

October  8,  1871.  While  all  money  and  valu- 
ables were  safely  withdrawn,  most  of  the  books 
and  records  of  the  Company  were  destroyed 
in  the  vaults,  and  practically  no  legible  details 
remained  of  some  six  hundred  accounts  involv- 
ing a  sum  of  about  two  million  dollars.  Under 
extraordinary  confusion  and  public  excitement 
the  Company  resumed  general  business  on  the 
ninth  day  after  the  outbreak  of  fire,  and  at 
once  began  what  seemed  the  insuperable  task 
of  adjusting  its  affairs.  By  the  end  of  the 
year,  however,  such  progress  had  been  made 
that  only  some  doubtful  claims  remained  to 
be  settled,  but  even  these,  although  apparently 
indicating  a  loss  to  the  Company  of  about 
$58,500,  were  in  a  short  time  paid  in  full. 
Back  in  the  early  days  there  was  occasion  for 
the  Company  to  issue  some  circulating  notes. 
These  were  put  out  as  a  defensive  measure, 
and  the  issue  of  the  notes  must  be  considered 
unique  among  trust  company  policies  of  the 
last  sixty  years. 

The  first  offices  of  the  Company  were  located 
in  the  building  at  the  northwest  corner  of 
South  Water  and  La  Salle  Streets,  until  i860, 


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Directors  of  Eminence  105 

when  a  change  was  made  to  the  Dickey  Build- 
ing, at  the  southwest  corner  of  Lake  and  Dear- 
born Streets.  While  still  here,  in  1871,  the 
great  fire  occurred  and  business  was  temporarily 
transacted  at  the  residence  of  Solomon  A. 
Smith,  then  President  of  the  Company,  until 
the  spring  of  1872  when  quarters  were  taken  in 
the  Manierre  Building.  In  1881  the  Company 
moved  to  the  Portland  Block,  from  which  in 
1900  it  changed  to  its  present  location,  The 
Merchants'  Loan  &  Trust  Building  at  Adams 
and  Clark  Streets. 

The  Presidents  have  been,  in  succession:  J. 
H.  Dunham,  1857-1862;  Henry  Farnam,  1862- 
1863;  Solomon  A.  Smith,  1863-1879;  John 
Tyrell,  1879-1884;  J.  W.  Doane,  1884-1898; 
and  Orson  Smith,  1898-19 16.  The  last  named 
is  now  Chairman  of  the  Board  and  Edmund  D. 
Hulbert  is  President. 

The  Company  has  been  happy  in  its  relations 
with  a  number  of  men  of  commanding  genius 
and  influence  who  have  helped  to  guide  its 
affairs.  On  the  same  board  of  directors  sat 
Marshall  Field,  Cyrus  H.  McCormick,  George 
Armour,    and    George    M.   Pullman.     On    the 


io6      Story  of  Trust  Companies 

death  of  Marshall  Field  in  1906,  his  estate  was 
bestowed  in  trust  with  the  Company,  a  testa- 
mentary trust  the  size  and  importance  of  which 
had  never  to  that  time  been  equaled.  Four 
years  later,  upon  the  death  of  Chief  Justice 
Melville  W.  Fuller,  of  the  United  States  Supreme 
Court,  it  was  found  that  he  too  had  named  the 
Company  to  be  the  executor  of  his  will. 

The  growth  of  this  important  central  western 
institution  during  late  years,  with  some  com- 
parisons of  growth  on  the  part  of  the  older  trust 
companies  of  the  East,  will  be  recorded  in  the 
next  chapter. 

An  event  of  world-wide  moment  occurred 
in  1858,  when  the  first  Atlantic  cable  message 
passed  between  Queen  Victoria  and  President 
Buchanan,  its  wording,  "Glory  to  God  in  the 
highest,  and  on  earth  peace,  goodwill  toward 
men."  Small  indeed  was  the  glimpse  then 
to  be  had  by  business  people,  including  the 
trust  company  men  of  that  period,  into  the 
coming  years  when  this  invention  was,  by 
conjoining  two  great  continents,  to  afford 
instantaneous  intercourse  regarding  the  million- 
dollar  affairs  of  modern  days. 


CHAPTER  VIII 

1865.         SIX       PIONEER      COMPANIES.      GROWTH 
SINCE   THE   CIVIL  WAR 

The  story  of  the  trust  companies  down  to 
the  time  of  the  Civil  War  has  been  told.  Of 
the  concerns  organized  before  1865  with  original 
trust  powers  and  destined  to  survive  until  our 
own  times,  there  were  six  great  pioneers,  the 
Farmers',  the  New  York  Life,  the  Pennsylvania 
Company,  the  Girard,  the  United  States,  and 
the  Merchants'  of  Chicago.  These  stand  alone, 
for  no  record  appears  of  any  other  trust  com- 
pany which  now  survives  having  been  char- 
tered, as  such,  between  the  years  1848  and  1864 
inclusive.  In  their  beginnings,  marked  mainly 
by  timid  efforts  to  unite  fire  and  life  insurance 
undertakings  with  a  business  as  fiduciaries, 
the  ground  work  was  laid  for  the  great  futures 
of  each,   as   well   as   of   their   later  imitators. 

From  now  on,  however,   most  of  the  quaint- 

107 


io8       Story  of  Trust  Companies 

ness  and  much  of  the  public  misapprehension 
which  so  long  existed  fades  away  as  we  come 
to  some  individual  narratives  of  how  the  com- 
panies have  grown  and  thrived  during  the  half 
century  just  passed. 

On  June  30,  191 5,  there  were  seventy  trust 
companies  in  the  United  States,  each  of  which 
had  upwards  of  fifteen  millions  of  dollars  of 
total  resources.  The  pages  which  follow  will 
be  generally  devoted  to  accounts  of  their 
marvelous  accomplishments  since  1865. 

Of  the  sextette  of  pioneers,  the  Farmers* 
Loan  &  Trust  Company,  the  oldest  in  point  of 
privilege  to  execute  trusts,  has  always  main- 
tained first  place,  although  to-day,  191 6,  there 
are  three  other  companies,  the  balance  sheets 
of  which  present  larger  aggregates.  These 
are  the  Guaranty  (New  York  Guaranty  &  In- 
demnity Company,  1864- 1890),  the  Bankers, 
and  the  Central,  all  sister  institutions  in  the 
great  city  of  New  York.  Some  of  their  achieve- 
ments will  be  related  farther  along,  but  the 
reader's  attention  is  now  invited  to  the  stories 
of  the  original  six  institutions  chartered  for 
trust  business  between  the  years  1822  and  1857. 


New  York  Stock  Exchange  and  office  of  the  New  York  Guaranty 
&  Indemnity  Company,  Broad   Street,   1866. 


Growth  of  the  Farmers'         109 

The  Farmers'  Loan  &  Trust  Company  re- 
mained in  Wall  Street  until  1868.  During 
almost  fifty  years  since,  it  has  occupied  a 
building  of  its  own  at  the  comer  of  Exchange 
Place  and  William  Street.  The  Presidents  of 
the  institution  since  1836  have  been:  Robert 
C.  Cornell,  1843;  Dow  D.  Williamson,  1846; 
Rosewell  G.  Rolston,  1865;  and  Edwin  S. 
Marston  from  1898  to  date. 

As  the  first  of  the  trust  companies  it  has  had 
identified  with  it  many  other  names  of  promi- 
nent New  Yorkers,  among  which  may  be  men- 
tioned Thomas  Tileston,  Shepherd  Knapp, 
Moses  Taylor,  Daniel  Drew,  and  CorneHus 
Vanderbilt. 

A  forty-year  comparison  of  its  balance-sheet 
totals  shows  an  ever  increasing  volume  of 
assets.     They  have  been: 

In  1876,  June  30th  $    6,922,679.79 

In  1886,  December  ist  23,320,041.73 

In  1896,  June  30th  35,930,609.00 

In  1906,  June  30th  79,876,966.98 

In  1916,  June  30th  173,001,686.14 

This  last  total,  which  also  appears  at  the 
conclusion  of  this  volume,  made  the  Company 


no       Story  of  Trust  Companies 

in  the  summer  of  191 6  the  fourth  in  size  in  the 
country. 

The  Farmers'  of  to-day  is  an  institution  of 
$1,000,000  of  capital,  and  with  nearly  eight 
times  that  amount  held  in  surplus  and  undivided 
profits.  It  employs  more  that  three  hundred 
officers  and  clerks,  has  a  local  branch  in  Fifth 
Avenue,  and  takes  care  of  foreign  commitments 
with  agencies  in  London,  Paris,  and  Berlin. 
Its  annual  dividends  are  at  the  rate  of  fifty 
per  cent,  paid  upon  stock  now  quoted  at  $1600 
per  share,  which  quotation  is  the  highest  in 
the  list  of  New  York  City  trust  companies. 
It  is  America's  oldest  trust  company;  there  is 
none  better  known  or  more  widely  respected. 

The  New  York  Life  Insurance  &  Trust 
Company  remained  under  William  Bard  as 
President  until  1843.  In  succession  came 
Stephen  Allen  and  John  R,  Townsend,  until 
1846.  For  twenty-five  years  thereafter  David 
Thompson  was  the  Company's  head,  and  from 
1 87 1  to  1916  Henry  Parish  has  made  a  record 
of  the  longest  executive  administration  of 
affairs  ever  enjoyed  by  any  trust  company. 
As  it  is,   Mr.   Parish   continues  his  labors   as 


Growth  of  ''  New  York  Life  "     iii 

Chairman  of  the  Board.  In  191 6,  after  forty- 
five  years  of  untiring  service,  a  new  incumbent, 
Walter  Kerr,  succeeded  to  the  presidency. 

The  Company  has  prospered  since  the  days 
of  1830.  Witness  total  resources,  since  the 
dates  already  accounted  for,  as  follows:  In 
1876,  thirteen  millions;  in  1886,  nineteen  mil- 
lions; in  1896,  twenty-eight  millions;  in  both 
1906  and  1916,  forty  milHons.  Among  its 
present  HabiHties  are  $1,000,000  of  capital 
stock,  $4,000,000  of  surplus  and  undivided 
profits,  and  annuity  and  Ufe  insurance  funds, 
maintained  as  of  old  but  now  amounting  to 
nearly  $3,000,000.  The  stock  now  pays  45 
per  cent,  dividends  annually.  Down  to  July 
I,  191 6,  the  aggregate  dividends  paid  had 
amounted  to  $20,280,000,  or  2028  per  cent, 
upon  the  Company's  $1,000,000  of  capitaliza- 
tion. The  present  bid  price  of  the  stock  is 
$970  per  share. 

This  splendid  old  institution  "accepts  only 
private  trusts  and  declines  all  corporation  or 
other  public  trusts."  It  has  numbered  among 
its  trustees  one  generation  after  another  of 
eminent  New  Yorkers.     As  an  example,    be  it 


112       Story  of  Trust  Companies 

remembered  that  three  Astors  have  sat  upon 
the  board,  beginning  with  the  original  John 
Jacob,  one  of  the  sixty-one  incorporators. 

Since  1830  the  Company  has  always  made 
Wall  Street  its  home.  In  1871  the  address 
became  No.  52,  and  there  to-day,  although 
scorning  some  modern  devices,  even  registry 
in  the  telephone  book,  the  offer  is  publicly  made 
of  "Protection  for  Widows,  Children,  and  Old 
Age,"  while  the  days  of  old  are  kept  in  memory 
by  announcements  that  even  in  1916  the  institu- 
tion "allows  interest  on  deposites." 

Like  its  New  York  confreres,  the  Pennsyl- 
vania Company  for  Insurances  on  Lives  and 
Granting  Annuities  has  progressed  during  all 
the  years  since  its  reorganization  with  trust 
powers  in  1836. 

Its  presidents  since  1857  have  been  but  four: 
Charles  Dutilh,  until  1873;  Lindley  Smyth, 
until  1893;  Henry  N.  Paul,  until  1899,  and 
C.  S.  W.  Packard  to  date.  The  offices  since 
1890  have  been  at  No.  517  Chestnut  Street. 
In  that  year  a  site  was  obtained  opposite  the 
State  House.  On  the  spot  where  the  old 
American  Hotel  had  stood  a  massive  building 


"Pennsylvania  Company  "       113 

was  erected  containing  what  was  then  famous  as 
"the  largest  banking  room  in  the  world." 

There  the  "Pennsylvania  Company"  has 
thrived,  enjoying  a  substantial  trust  business 
and  showing  during  thirty  years  past  a  growth 
in  resources  and  liabilities  of  from  fourteen 
millions  in  1896  to  twenty- three  millions  in 
1906,  with  a  grand  total  in  the  summer  of 
191 6  of  forty- three  millions  of  dollars.  The 
capital  is  now  $2,000,000,  the  surplus  and  un- 
divided profits,  $5,300,000.  The  shareholders 
receive  regularly  twenty-eight  per  cent,  divi- 
dends on  their  holdings. 

The  fourth  of  our  pioneer  companies,  the 
Girard  of  Philadelphia,  after  the  death  of 
Mr.  Richards,  the  first  President,  in  1851, 
continued  an  uneventful  but  thrifty  business 
during  some  years.  From  the  beginning  of 
the  1857  panic  to  the  end  of  the  Civil  War,  its 
dividends  were  never  less  than  seven  and  one- 
half  per  cent. 

In  1 86 1,  responding  to  a  call  from  the  Com- 
mittee of  Public  Safety,  organized  to  raise 
funds  for  the  defense  of  Philadelphia,  the 
Company  contributed   its  pro  rata  share;   in 


114      Story  of  Trust  Companies 

1862,  a  subscription  was  made  to  the  Bounty 
Fund  for  Volunteers,  and  in  1863  another  to 
the  fund  for  raising  troops. 

The  offices  were  removed  from  time  to  time 
upwards  on  Chestnut  Street,  and  after  several 
such  moves,  owing  to  the  need  for  enlarged 
quarters,  the  institution  in  1908  took  up  its 
home  in  the  beautiful  building  it  still  occupies 
at  the  northwest  corner  of  Broad  and  Chestnut 
Streets. 

Philadelphia  experienced  some  little  financial 
depression  for  a  year  or  two  following  the 
closing  of  the  Centennial  Exposition,  but  after 
this  anxiety  was  removed  the  Company  entered 
upon  a  period  of  steady  and  pronounced  growth. 
In  1878  the  business  of  life  insurance  was 
discontinued;  by  1887  the  Company's  deposits 
subject  to  check  amounted  to  about  one  million 
of  dollars  and  its  trust  estates  to  about  ten 
millions  of  dollars;  these  figures  to-day  are 
$47,000,000  and  $188,000,000  respectively. 
The  capital  was  increased  to  $1,000,000  in  1886, 
and  to  $2,000,000  in  1899,  when  the  present 
title  was  adopted,  Since  1901  it  has  been 
$2,500,000,  and   the  present  surplus  is  nearly 


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Girard  Trust  115 

,000,000.  The  Girard  Trust  Company  in 
recent  years  has  paid  thirty-six  per  cent,  divi- 
dends ($900,000  per  annum)  on  its  capital  and 
in  this  respect  divides  honors  with  one  other 
great  institution  of  that  city,  hereinafter  to  be 
described,  the  Provident  Life  &  Trust  Com- 
pany of  Philadelphia,  which  annually  distri- 
butes $360,000  to  the  holders  of  its  $1,000,000 
of  share  capital. 

It  is  worthy  of  special  note  that  the  Girard, 
immediately  after  its  incorporation,  paid  a  first 
dividend  in  1837,  and  that  notwithstanding 
panics  and  financial  upheavals  in  the  country 
there  has  been  only  one  break  in  the  dividend 
record — that  of  a  semi-annual  disbursement  in 
1842.  The  figures  of  total  assets  twenty  years 
ago,  ten  years  ago,  and  in  191 6  have  been 
$12,000,000,  $43,000,000,  and  $54,000,000  re- 
spectively. 

Only  three  Presidents  have  succeeded  Mr. 
Richards,  namely,  Thomas  Ridgway,  1851- 
1883;  John  B.  Garrett,  1 883-1 887;  and  Effing- 
ham B.  Morris,  during  whose  incumbency  of 
almost  thirty  years  the  Company's  notable 
growth  has  been  achieved,  and  to  whose  wise 


ii6      Story  of  Trust  Companies 

foresight  was  due  the  erection  of  the  first 
imposing  financial  building  in  Philadelphia 
in  a  section  which,  largely  on  that  account,  has 
become  the  financial  center  of  the  city. 

The  United  States  Trust  Company  of  New 
York,  as  has  been  shown,  started  business  at 
No.  40  Wall  Street.  From  1858  to  1865  it  was 
at  No.  48  Wall  Street;  until  1887  it  was  at  No. 
49  Wall  Street,  opposite;  and  since  then  its 
home  has  been  in  the  building  known  as  No. 
45  Wall  Street. 

From  1868  to  1903  John  A.  Stewart  served 
as  President.  In  the  latter  year,  which  was 
the  Company's  fiftieth  anniversary,  he  was 
appointed  Chairman  of  the  Board  of  Trustees. 
This  was  a  relief  from  arduous  and  confining 
services  without,  however,  depriving  the  Com- 
pany of  his  knowledge  and  experience  and  the 
benefit  of  his  counsel  and  advice.  To-day, 
19 1 6,  Mr.  Stewart,  after  having  entered  the 
Company's  service  sixty-three  years  ago  and 
with  but  a  single  interruption,  while  he  acted 
as  Assistant  Treasurer  of  the  United  States, 
during  the  Civil  War,  is  still  to  be  found  at  his 
desk  each  day  attending  as  of  old  to  the  re- 


''United  States"  and  "Merchants'  "  117 

sponsible  affairs  of  the  Company.  After  1903, 
Lyman  J.  Gage,  who  had  been  Secretary  of  the 
Treasury,  took  up  the  duties  of  President, 
being  succeeded  three  years  later  by  Edward 
W.  Sheldon. 

The  Company's  growth  during  forty  years 
past  will  be  seen  from  the  following  tabulation 
of  resources  and  liabilities: 

1876  June  30  $26,050,641.61 

1886  December  14  41,058,004.94 

1896  December  31  48,650,127.26 

1906  June  30  70,918,857.64 

1916  June  30  80,955,731.66 

Included  in  the  present  liabilities  are  $2,000,000 
capital  stock  and  $14,400,000  of  surplus  and 
undivided  profits.  The  annual  dividend  rate 
is  fifty  per  cent,  and  the  stock  is  quoted  at 
$1035  per  share. 

The  sixth  of  the  pioneer  companies,  The 
Merchants'  Loan  &  Trust  Company  of  Chicago, 
was  sketched  in  the  previous  chapter.  A  word 
must  be  added,  however,  regarding  its  growth 
since  1896,  when  the  Company's  balance  sheet 
showed  a  total  of  $16,000,000,  increasing  in 
1906  to  $58,000,000,  and  in  1 916  to  $84,000,000. 


ii8       Story  of  Trust  Companies 

It  is  in  order  here  to  show  one  or  two  illus- 
trations of  the  sort  of  services  which  trust 
companies  render.  At  this  period,  issues  of 
securities  and  investments  therein  were  natu- 
rally on  a  most  limited  scale,  as  compared  with 
present-day  issues  and  investment  holdings. 
But  from  about  this  time  it  became  the  practice, 
less  as  an  experiment  and  more  with  recogni- 
tion of  the  fitness  of  the  trust  companies  to  act 
in  representative  capacities,  for  corporations, 
associations,  and  individuals  to  avail  of  the 
facilities  now  to  be  described. 

Modern  practice  requires  that  a  railroad  or 
industrial  corporation  desiring  to  issue  bonds 
shall  execute  a  deed  of  trust,  conveying  the 
property,  securing  the  bonds  to  a  trustee,  who 
upon  the  face  of  the  bonds  certifies  that  the 
property  has  been  so  pledged,  that  the  issue 
is  on  certain  terms,  and  that  each  bond  is  one 
of  the  total  number  issued.  This  duty  is  now 
almost  invariably  performed  by  a  trust  com- 
pany, which  arranges  also,  when  desired,  to 
register  the  ownership  of  the  bond,  paying 
interest  thereon  by  check  instead  of  upon  the 
presentation  of  coupons.     In  a  similar  manner 


Functions  Illustrated  119 

a  trust  company  will  act  as  registrar  of  an 
issue  of  stock,  another  company  recording 
transfers  of  ownership  of  the  shares;  this  leads 
to  the  certification  of  stockholders'  lists  for 
dividend  purposes;  and  all  of  these  services 
are  performed  in  consideration  of  regular  fees, 
which  contribute  largely  to  the  gross  income  of 
the  company.  Among  other  services  rendered 
may  be  mentioned  the  duty  of  acting  under 
appointments  as  executor,  administrator,  guar- 
dian, and  as  committee.  Corporate  and  indi- 
vidual trusts  are  also  undertaken  involving 
the  deposit  of  money  and  securities,  the  prin- 
cipal and  income  of  which  are  to  be  devoted  to 
specific  purposes.  Sometimes  these  deposits 
are  made  until  reorganization  arrangements  can 
be  effected.  Occasionally  they  are  subject  to 
distribution  under  escrow  agreements,  and 
almost  always  the  trust  company  is  asked,  and 
consents,  to  assume  responsibilities  involving 
the  safeguarding  of  property,  or  to  exercise 
discretion  in  its  management  to  a  degree  beyond 
that  which  individuals  would  care  to  employ, 
or  would  be  warranted  in  having  entrusted  to 
them. 


120      Story  of  Trust  Companies 

Among  thousands  of  commitments  of  this 
character  one  or  two  modem  appointments  of 
the  trust  companies  already  described  will  be 
made  to  serve  as  outlining  these  functions. 

The  Farmers'  Loan  &  Trust  Company  now 
registers  some  $30,000,000  of  capital  stock  of 
the  Delaware,  Lackawanna,  and  Western  Rail- 
road and  over  $170,000,000  of  capital  stock  of 
the  New  York,  New  Haven,  and  Hartford  Rail- 
road. Since  1896  it  has  been  trustee  under  an 
issue  of  Northern  Pacific  Railway  General  Lien 
and  Land  Grant  Gold  three  per  cent,  bonds. 
The  authorized  issue  is  $190,000,000  and  this 
trust  will  continue  until  the  maturity  of  the 
bonds  in  the  year  2047. 

In  the  late  summer  of  1916  the  United  King- 
dom of  Great  Britain  and  Ireland  turned  to 
the  United  States  for  financial  aid,  arranging  a 
two-year  five  per  cent,  loan  of  $250,000,000, 
secured  by  some  $300,000,000  of  stocks  of 
American  corporations  and  bonds  of  the  Domin- 
ion of  Canada  and  other  foreign  governments. 
In  appointing  a  trustee,  as  custodian  for  this 
vast  gathering  of  wealth  from  abroad,  under  a 
pledge  agreement  executed  by  the  Government 


A  Notable  Modern  Trusteeship    121 

of  the  United  Kingdom,  the  choice  fell  upon 
The  Farmers'  Loan  &  Trust  Company.  With- 
out describing  the  great  volume  of  labor  re- 
quired in  the  handling  of  these  securities,  it 
will  be  possible  to  judge  somewhat  of  the  magni- 
tude of  such  a  transaction  when  it  is  stated  that 
the  mere  task  of  certifying  the  bonds  issued 
under  this  agreement  has  lately,  and  within 
the  space  of  a  few  days  of  time,  required  the 
officers  of  the  Farmers'  to  affix  their  names  to 
bonds  containing  no  less  than  165,000  signatures. 


CHAPTER  IX 

INCORPORATIONS    FROM    1 865    TO    1 868 

As  we  look  back  to  the  dark  days  of  1864  in 
the  Nation's  history,  it  is  worthy  of  special 
mention  that  one  great  American  trust  com- 
pany should  have  been  started  at  such  a  time. 
This  was  the  Union  Trust  Company  of  New 
York,  incorporated  April  23,  1864,  and  opened 
for  business  in  1865  at  No.  73  Broadway. 
This  first  address  was  at  the  corner  of  Rector 
Street,  where  the  Company  was  domiciled 
for  nearly  twenty  years.  Its  first  President 
was  I.  H.  Frothingham.  Toward  the  end  of 
this  period  the  building  became  famous  as 
the  scene  of  an  attempt  upon  the  life  of  Russell 
Sage,  who  was  there  attacked  by  the  insane 
bomb  thrower,  Norcross.  Mr.  Sage  was  one 
of  the  Company's  early  Trustees.     The  boards 

in  the  early  years  also  included  a  number  of 

122 


Union  of  New  York  123 

other  prominent  financiers,  among  whom  may 
be  mentioned  David  Dows,  Robert  Goelet, 
Abiel  A.  Low,  James  S.  Wadsworth,  and  Cor- 
neHus  and  WilHam  H.  Vanderbilt. 

In  1876  the  Company's  total  assets  amoimted 
to  nearly  $11,000,000;  in  1886  they  were  $26,- 
000,000;  in  1896,  $39,000,000;  in  1906,  $53,000,- 
000;  and  in  191 6,  $95,000,000. 

Throughout  the  thirty-five  years  ended  1908 
Edward  King  served  as  President.  During 
the  following  year  John  W.  Castles  acted  in 
that  capacity.  Since  19 10  Edwin  G.  Merrill 
has  been  President. 

In  1886  the  Company  received  an  appoint- 
ment as  trustee  under  a  deed  of  trust  which 
has  been,  and  will  long  continue  to  be,  famous 
for  the  length  of  term  of  the  bonds  secured 
thereby.  This  covered  the  issue  by  the  West 
Shore  Railroad  of  $50,000,000  of  first  mortgage 
four  per  cent,  bonds,  due  475  years  after  their 
date,  that  is  in  the  year  2361. 

The  Union  Trust  Company  made  it  a  rule, 
long  before  the  days  of  statutory  reserves  being 
compulsory,  to  keep  large  sums  of  cash  on  hand 
to  secure  deposits.     This  fund  was  mostly  in 


124       Story  of  Trust  Companies 

gold  and  was  maintained  from  1884  onward  in 
an  amount  which  never  fell  below  $3,000,000, 
and  was  sometimes  larger.  This  voluntary 
practice  was  always  deemed,  both  within  and 
without  the  Company,  to  be  on  lines  of  the 
utmost  of  prudence  and  conservatism. 

The  Company  to-day  has  $3,000,000  of 
capital  and  $5,500,000  of  surplus  and  undivided 
profits.  Dividends  were  paid  in  19 15  at  the 
rate  of  seventeen  per  cent.  The  stock  sells 
at  $380  per  share. 

The  offices  for  years  have  been  in  the  Com- 
pany's own  building  at  No.  80  Broadway. 
Recently  there  have  been  two  uptown  branches 
established,  one  at  Thirty-eighth  Street  and 
Fifth  Avenue;  the  other  on  the  same  Avenue, 
fronting  Central  Park  at  Sixtieth  Street. 

On  Third  month  22-,  1865,  eighteen  days 
before  Lee's  army  laid  down  their  arms  before 
General  Grant  and  the  Union  forces  at  Appo- 
mattox, a  charter  was  bestowed  upon  the  Provi- 
dent Life  &  Trust  Company  of  Philadelphia. 
This  was  the  third  great  institution  to  be  formed 
in  the  City  of  Brotherly  Love.  The  organiza- 
tion was  brought  about  by  a  few  members  of 


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Provident  Life  of  Philadelphia  125 

the  Society  of  Friends.  Thirty-three  years 
previously  some  members  of  that  Society  had 
estabHshed  the  Friends'  Provident  Institution 
of  Bradford,  England.  Its  operations  were 
confined  to  insurance  of  the  lives  of  birthright 
Friends,  and  its  experience  had  shown  a  re- 
markably low  mortality,  owing  to  the  excep- 
tional longevity  among  the  members  of  that 
sect.  Accordingly,  these  Friends  of  a  genera- 
tion later,  attracted  by  the  success  of  the  earlier 
institution,  felt  drawn  to  the  idea  of  life  insur- 
ance, and  since  a  capital  stock  was  a  legal 
requirement  for  that  business,  had  the  charter 
include  the  authority  to  transact  a  trust  busi- 
ness also,  the  profit  from  which  should  remune- 
rate the  stockholders,  it  being  provided  that 
the  entire  surplus  in  the  insurance  department 
should  accumulate  for  the  benefit  of  the  policy 
holders,  so  that  the  only  advantage,  direct  or 
indirect,  which  the  stockholders  could  at  any 
time  have  from  the  union  of  the  two  features 
of  the  business  would  result  from  the  fact  that 
the  management  of  the  trust  business,  from 
which  they  derive  their  profit,  would  be  done 
for  them  without  charge. 


4 


126      Story  of  Trust  Companies 

The  proposed  business  was  not,  however, 
to  be  confined  to  Friends,  but  dealings  were  to 
be  had  with  "others  of  like  careful  habits," 
The  Company's  first  President  was  Samuel  R. 
Shipley.  It  began  business  in  a  basement  at 
No.  247  South  Third  Street,  and  the  records 
show  that  on  Tenth  month  i^-,  1865,  the  build- 
ing at  No.  Ill  South  Fourth  Street  was  leased. 

The  very  early  records  contain  many  quaint 
facts,  as  viewed  in  the  light  of  larger  develop- 
ments in  later  years.  For  example,  on  Tenth 
month  9—,  1865,  the  minutes  recorded:  "The 
engagement  on  trial  of  Joseph  R.  Smith  as  City 
Canvasser,"  and  a  month  later  that  he  had 
"given  up  the  position,  for  physical  disability 
after  a  trial  of  one  and  a  half  weeks."  That 
the  Company  was  provident  in  practice  as  well 
as  in  name,  is  shown  in  the  record  of  "the  pur- 
chase on  very  favorable  terms  from  the  North 
American  Transit  Insurance  Company  of  the 
desks  and  office  furniture  required  for  the  new 
office  at  No.  iii  South  Fourth  Street." 

The  capital  was  increased  in  1871,  by  sub- 
scription, to  $500,000,  and  two  years  later  the 
Company  moved  into  its  own  building  at  No. 


A  Half  Century  of  Service      127 

108  South  Fourth  Street,  The  Company's 
President  at  the  present  time  is  Asa  S.  Wing, 
who  has  been  in  its  service  since  1867,  first  as 
assistant  actuary,  later,  and  until  1906,  as 
vice-president  and  actuary. 

The  Provident  Life  &  Trust  in  1879  took  up 
quarters  in  its  own  building  at  No.  409  Chest- 
nut Street,  where  it  still  continues  to  transact 
an  insurance  and  trust  business.  It  is  one  of 
the  very  few  life  insurance  institutions  having 
both  life  insurance  and  trust  departments. 
In  1866  the  deposits  were  reported  at  $78,109.69. 
By  1875,  the  total  resoiuces  were  about  $2,6cd,- 
000.  In  1885,  they  were  a  shade  over  $9,000,000. 
Ten  years  later,  in  1896,  the  aggregate  had 
increased  to  approximately  $40,000,000.  The 
totals  for  1906  and  191 6  were  $73,000,000  and 
$105,000,000,  respectively,  the  figures  for  the 
latter  year  composing  insurance  assets  of 
$83,960,190.51  and  assets  apart  from  insur- 
ance of  $21,354,620.13.  On  June  30th  of  the 
year  last  named  the  Company's  capital  was 
$1,000,000  and  its  surplus  and  undivided  profits 
upwards  of  $5,500,000.  The  annual  dividend 
rate  is  thirty-six  per  cent. 


128       Story  of  Trust  Companies 

Again  in  Philadelphia,  in  1866,  was  seen 
the  birth  of  a  new  trust  company  known  as 
the  Fidelity  Insurance  Trust  &  Safe  Deposit 
Company.  As  will  be  seen  from  the  Company's 
title,  insurance,  fidelity  and  trust  plans  were 
supplemented  by  authority  "to  receive  upon 
deposit  for  safekeeping,  jewelry,  plate,  stocks, 
bonds,  and  valuable  property  of  every  kind." 
In  all  the  early  advertisements  of  the  Company 
great  stress  was  laid  upon  this  function.  It 
was  the  first  concern  to  be  known  as  a  safe 
deposit  company  in  Philadelphia  and  its  objects 
were  stated  in  the  first  prospectus  in  the 
following  words: 

"The  great  wealth  of  the  country,  the 
vast  amount  of  Government  and  other  Loans, 
transferable  by  delivery,  and  held  by  the 
uncertain  tenure  of  possession,  the  injury 
and  inconvenience  resulting  from  the  loss  of 
these  and  registered  securities,  demand  a 
means  of  protecting  such  property  from  the 
risks  of  Fire,  Accident,  Robbery  and  Theft, 
which  no  arrangements  hitherto  existing 
have  afforded.  A  place  of  absolute  safety 
FOR  ALL  SUCH  SECURITIES  has  bccomc  a 
pressing  necessity.     It  is  to  supply  this  that 


Fidelity  of  Philadelphia         129 

the  present  Institution  has  been  founded. 
It  is  the  purpose  of  the  Managers  to  provide 
for  their  depositors  every  security  against 
fire,  depredation,  or  accident,  which  archi- 
tectural and  mechanical  skill  can  combine  in 
the  structure  and  material  of  their  building, 
VAULTS,  and  safes.  The  location  of  their 
building — between  the  First  National  Bank 
and  the  Bank  of  North  America — is  in  itself 

a  GUARANTEE  OF  SECURITY  difficult  tO  sur- 
pass. The  internal  police  of  the  office  has 
been  organized  with  special  care,  and  there 

will  be  A  CONSTANT  NIGHT-WATCH  INSIDE  THE 
premises;  AND  TO  THIS  IS  TO  BE  SUPER- 
ADDED THE  PROTECTION  OF  A  LARGE  CAPITAL." 

The  interest  with  which  the  enterprise  was 
at  first  received,  was  largely  increased  by  the 
frequency  of  burglaries  of  banks  and  of  offices, 
which  occurred  before  the  incorporation  and 
for  a  few  years  afterwards.  Among  these  may 
be  mentioned  the  robbery  of  the  Common- 
wealth Bank  of  Philadelphia  in  1865,  and  of  a 
ninety  thousand  dollar  loss  from  the  same 
cause  by  Cochran  &  Co.,  wine  merchants  on 
Walnut  Street.  This  occurred  in  1866,  and 
in  the  same  year  the  Hartford  Bank  experienced 


130      Story  of  Trust  Companies 

similar  troubles.  Other  alarming  robberies 
occurred  at  about  the  same  time,  sixty  thousand 
dollars  from  the  Mechanics  Fire  Insurance  Co. 
of  New  York  and  large  sums  from  the  Ocean 
Bank  of  New  York,  the  Boyleston  Bank  of 
Boston,  the  Third  National  Bank  of  Baltimore, 
and  the  Consolidated  Bank  of  Louisiana.  In 
1869  a  large  robbery  occurred  in  Philadelphia 
at  the  Beneficial  Savings  Fund  Society,  Twelfth 
and  Chestnut  Streets,  and  two  years  later 
another  took  place  at  the  Kensington  National 
Bank. 

Of  all  these  great  thefts  the  most  sensational 
was  that  at  the  Kensington  National  Bank, 
which  occurred  in  February,  1871;  it  was  re- 
ported that  $120,000  of  bonds  were  taken. 
The  burglars  obtained  an  entrance  into  the 
Bank  upon  the  pretense  of  being  police  sent 
by  the  authorities  to  prevent  an  alleged  intended 
robbery,  and  in  this  case,  as  in  the  others,  it 
was  determined  that  the  Bank  had  not  been 
guilty  of  such  negligence  as  would  render  it 
liable. 

The  effect  of  the  feeling  of  insecurity  caused 
by   these  depredations  was   that   safe   deposit 


Fifty  Years  of  Progress         131 

companies  sprang  up  in  various  parts  of  the 
country,  the  Fidelity  being  the  second  to  appear, 
one  in  New  York  having  preceded  it  by  but  a 
short  time.  Similar  companies  were  started 
in  Cincinnati,  Baltimore,  and  other  cities. 
Emphasis  upon  this  branch  of  the  Company's 
business  from  its  inception  down  to  the  present 
year,  has  made  the  clause  "Security  from  loss 
by  burglary  and  robbery,  fire  or  accident"  a 
most  effective  feature  of  publicity. 

The  Company  was  opened  for  business  on 
September  i,  1866.  Its  first  President  was 
Clarence  H.  Clark,  who  was  succeeded  by 
N,  B.  Browne  and  then  by  Stephen  A.  Caldwell, 
who  in  turn  was  followed  by  John  B.  Gest  in 
1890.  For  fifteen  years  following  1900,  Rudulph 
Ellis  was  President,  being  succeeded  in  19 15 
by  WilHam  P.  Gest,  who  had  been  Vice-Presi- 
dent since  1900. 

The  Company's  offices  to-day  are  at  No. 
325  Chestnut  Street,  the  title  having  been  short- 
ened to  read  Fidelity  Trust  Company.  Since 
the  time  half  a  century  ago,  when  a  modest 
beginning  was  made  with  $250,000,  of  capital, 
gradual  increases  of  the  stock  have  occurred 


132      Story  of  Trust  Companies 

until  the  outstanding  shares  now  amount  to 
$4,000,000,  with  surplus  of  over  $13,000,000. 
The  dividend  rate  in  recent  years  has  been 
twenty-four  per  cent.  The  total  resources 
have  been  in  round  numbers:  1876,  $12,000,000; 
1886,  $18,000,000;  1896,  $19,000,000;  1906, 
$42,000,000;  and  1 916,  $47,000,000,  without 
including  trust  funds. 

Among  numerous  important  testamentary- 
trusts  which  have  been  committed  to  the  Com- 
pany the  best  known,  perhaps,  has  been  an 
appointment  dating  back  to  1894  by  Richard 
Smith  who  died  in  that  year.  Under  its  terms 
a  sum  not  exceeding  $500,000  was  devoted  to 
the  erection  in  Fairmount  Park,  of  a  monumen- 
tal granite  memorial  containing  statues  of  a 
number  of  distinguished  Civil  War  generals 
and  admirals,  of  which  the  most  conspicuous 
are  Generals  Hancock,  McClellan,  Meade,  and 
Reynolds.  This  magnificent  memorial  was 
duly  erected  in  Fairmount  Park  under  the 
trusteeship  of  the  Fidelity  Trust  Company, 
which  was  directed  further  to  spend  $50,000, 
in  the  erection  of  a  proper  building  and  the 
enclosing   of   a   children's   playground   in    the 


Brooklyn  Trust  Company       133 

Park.  This  worthy  undertaking  was  duly 
established  in  1899,  and  has  since  that  date 
been  continuously  maintained  under  the  di- 
rection of  the  trustee. 

The  companies  hereinbefore  described — that 
is,  the  ones  which  have  endured  down  to  the 
present — were  all  New  York,  Philadelphia,  or 
Chicago  companies.  In  1866  a  charter  was 
taken  out  by  a  Brooklyn  institution.  At  that 
period  the  population  of  what  is  now  Manhat- 
tan Borough  was  less  than  nine  hundred  thou- 
sand, while  Brooklyn  was  an  independent  city 
of  about  three  hundred  and  fifty  thousand. 
This  new  undertaking  was  known  as  the  Brook- 
lyn Trust  Company.  It  has  had  a  phenomenal 
growth  in  total  resources.  These  amounted 
in  1876  to  less  than  $2,000,000;  in  1886, 
$9,500,000;  1896,  $12,000,000;  in  1906,  $20,- 
000,000.  The  statement  of  June  30,  191 6, 
shows  upwards  of  $47,000,000. 

Ripley  Ropes  was  President  during  the  early 
years  and  was  succeeded  by  General  C.  T. 
Christensen,  who,  upon  his  death  in  1903, 
was  in  turn  succeeded  by  Theodore  F.  Miller. 
Edwin  P.  Maynard  has  been  President  since 


134       Story  of  Trust  Companies 

19 1 3.  The  Company  has  for  many  years 
made  its  home  at  No.  177  Montague  Street, 
adjoining  CHnton  Street,  where  on  a  plot  run- 
ning through  to  Pierrepont  Street  a  handsome 
modern  building  is  at  the  time  of  this  writing 
about  completed. 

The  Company's  capital  stock  twenty  years 
ago  was  $300,000.  In  19 13,  the  Long  Island 
Loan  &  Trust  Company  was  absorbed,  itself 
one  of  the  prominent  institutions  of  Brooklyn. 
The  capital  at  this  time  is  $1,500,000,  with 
surplus  and  undivided  profits  of  approximately 
$4,000,000.  The  stock  pays  dividends  at  the 
rate  of  twenty  percent.,  and,  in  addition,  extra 
dividends  from  time  to  time,  and  commands  a 
price  of  $520  per  share.  Among  developments 
of  recent  years  may  be  mentioned  the  estab- 
lishment of  a  branch  office  at  Fulton  Street  and 
Bedford  Avenue,  Brooklyn,  and  a  Manhattan 
office  at  the  corner  of  Wall  Street  and  Broadway. 

First  in  the  New  England  field,  mingling  the 
ideas  of  preservation  of  life  and  conservation 
of  wealth,  the  Rhode  Island  Hospital  Trust 
Company  began  its  career  in  1868. 

As  to  the  origin  of  its  name,  one  of  the  original 


Rhode  Island  Hospital  Trust    135 

» 

incorporators  in  speaking  of  the  early  history 
of  the  Company,  stated: 

"It  owed  its  existence  to  the  desire  of  a 
few  pubHc-spirited  men  to  create  what  should 
be  a  financial  institution  of  high  credit  and 
powerful  resources,  and  at  the  same  time 
prove  a  pecuniary  helper  to  the  Rhode  Island 
Hospital,  a  benevolent  institution  then  in 
its  infancy." 

Under  a  section  of  its  charter  the  Company 
was  required: 

"To  pay  over,  annually,  to  the  'Rhode 
Island  Hospital,'  for  its  use,  one-third 
part  of  all  the  net  profit  upon  the  capital 
stock  of  said  corporation  over  and  above  six 
per  cent,  thereon.  This  obUgation  shall 
continue  so  long  as  no  similar  act  of  incorpora- 
tion shall  be  granted  by  the  legislature  of 
this  State  to  other  parties  than  the  corporators 
herein." 

By  mutual  agreement  and  under  a  subse- 
quent settlement  with  the  Rhode  Island  Hos- 
pital, this  section  became  inoperative.  The 
early  association  of  the  two  institutions  was 
helpful  to  both  and  the  friendly  relations  of 


136      Story  of  Trust  Companies 

the  early  years  have  continued  to  the  present 
time. 

The  story  of  this  Providence  institution  is 
one  of  constant  growth  in  both  banking  and 
trust  undertakings.  As  far  back  as  1876  the 
balance  sheet  footed  $7,000,000;  by  1896  this 
aggregate  had  more  than  doubled  to  over 
$15,000,000;  in  1906  the  total  was  approxi- 
mately $30,000,000. 

In  that  year  an  important  local  bank  was 
acquired,  the  American  National,  and  since 
1909  when  the  capital  (shares  $1000  each)  was 
increased  from  $1,000,000  to  $2,000,000,  and  in 
191 1  to  $2,500,000,  the  Company  has  moved 
steadily  onward.  To-day  its  reported  surplus 
and  undivided  earnings  amount  to  over  $3,500,- 
000  (inclusive  of  $330,000  of  guaranty  and 
improvement  funds),  while  its  total  resources 
and  liabilities  have  risen  to  the  sum  of  $55,630,- 
437.74,  making  it  the  third  company  in  size 
in  New  England.  Herbert  J.  Wells  has  acted 
as  President  during  more  than  thirty  years 
past. 

An  important  Cleveland  institution,  estab- 
lished in  1868,  will  be  next  in  order  of  considera- 


The  Bankers  Almanac  of  1868    137 

tion,  but  before  describing  it  in  the  succeeding 
chapter  a  word  or  two  will  be  of  interest  as 
showing  how  little  the  trust  company  idea  was 
understood,  and  how  small  a  part  the  several 
companies  were  deemed  to  have  in  the  country's 
entire  banking  affairs  even  as  late  as  the  year 
1868.  A  glance  at  some  of  the  features  of  a 
financial  directory  published  in  that  year,  the 
Merchants  and  Bankers  Almanac  of  1868,  reveals 
the  names  and  some  of  the  particulars  regarding 
no  less  than  1650  national  banks,  270  State 
banks,  and  1400  private  and  savings  banks. 
To  these  a  list  was  appended  of  600  fire,  marine, 
and  life  insurance  companies.  Statistics  were 
shown  for  fluctuations  in  the  price  of  gold, 
English  consols  for  135  years,  and  iron,  cotton, 
hops,  and  molasses,  the  two  last-named  articles 
being  priced  for  over  forty  years  previous. 

The  only  reference,  however,  to  a  trust  com- 
pany was  a  one  page  advertisement  of  the 
National  Trust  Company,  then  at  No.  336 
Broadway  and  fated  within  the  next  few  years  to 
disappear  from  the  Httle  group  of  trust  corpora- 
tions which  might  then  have  been  given  a  place 
in  such  a  reference  book,  but  which  were  not 


138       Story  of  Trust  Companies 

until  many  years  later  inserted  in  the  "blue 
books"  and  cyclopedias,  along  with  their  con- 
temporaries, the  banks.  As  far  along  as  the 
early  nineties  it  was  the  exception,  not  the  rule, 
to  find  references  made  in  such  publications  to 
trust  company  directorates. 


CHAPTER  X 

PROGRESS  FROM    1 868  TO    1 873 

We  come  now  in  ovir  story  to  the  founding 
in  1868  of  one  of  the  greatest  financial  institu- 
tions in  the  Central  West.  This  was  the  Citi- 
zens Savings  &  Loan  Association  which,  as 
the  result  of  various  mergers  has  become  the 
Citizens  Savings  &  Trust  Company,  the  oldest 
and  largest  trust  company  in  Ohio. 

It  was  in  1903  that  three  of  Cleveland's 
best  known  financial  institutions,  the  Citizens 
Savings  &  Loan  Association,  the  Savings  & 
Trust  Company,  and  the  American  Trust  Com- 
pany, were  consolidated  under  the  title  of  the 
Citizens  Savings  &  Trust  Company,  each  con- 
tributing a  large  measure  of  financial  strength, 
and  each  bringing  its  quota  of  depositors  and 
patrons. 

The   Citizens   Savings   &   Loan   Association 

139 


140       Story  of  Trust  Companies 

began  business  in  temporary  offices  in  the  Wed- 
dell  House  Building  on  lower  Superior  Street. 
Some  time  later  it  moved  to  the  Wade  Building 
at  No.  1 08  Superior  Street  where  it  remained 
until  1894,  when  it  moved  to  larger  offices  on 
the  ground  floor  of  the  Case  Building,  the  site 
of  which  is  now  in  part  occupied  by  the  Post- 
Office  Building. 

The  institution  remained  in  its  location  in 
the  Case  Building  until  the  consolidation  above 
referred  to,  when  a  magnificent  new  fourteen- 
story  building,  the  Company's  present  home, 
was  erected. 

Among  those  comprising  the  first  directorate 
of  the  Citizens  Savings  &  Loan  Association 
were  such  well-known  names  as  Jeptha  H.  Wade, 
who  was  President  until  his  death  in  1890,  U. 
S.  Senator  Henry  B.  Payne,  and  George  Worth- 
ington.  From  1878  to  1881,  President  James 
A.  Garfield  was  a  member  of  the  Board  and 
Secretary  of  State  John  Hay  served  as  a  Director 
from  1883  to  1893. 

The  Savings  &  Trust  Company  was  the  first 
trust  company  organized  in  the  State  of  Ohio. 
It  opened  for  business  in  May,  1883,   in  the 


Citizens'  of  Cleveland  141 

Benedict  Building  on  Euclid  Avenue  and  sub- 
sequently purchased  the  property  on  Euclid 
Avenue  now  occupied  by  the  Union  National 
Bank,  in  which  building  it  remained  until  the 
consolidation  in  1903. 

The  American  Trust  Company  commenced 
business  in  1898  in  the  American  Trust  Build- 
ing on  the  west  side  of  the  Public  Square  and 
occupied  these  quarters  until  the  consolidation 
five  years  later. 

The  Citizens  Savings  &  Trust  Company 
conducts  its  business  along  the  most  conserva- 
tive yet  at  the  same  time  thoroughly  efficient 
lines.  Its  loans  are  made  exclusively  on  real 
estate  first  mortgages  or  on  approved  collat- 
eral. It  maintains  a  Foreign  Exchange  De- 
partment and  conducts  an  extensive  safe 
deposit  business.  It  is  well  known  throughout 
this  country,  and  in  many  places  abroad,  as 
the  Home  of  Banking  by  Mail,  and  in  this 
department  it  handles  many  hundreds  of 
thousands  of  dollars. 

Its  Trust  Department  has  charge  of  trust 
estates  amounting  to  many  millions.  Among 
the  many  trusteeships  which  have  been  handled 


142       Story  of  Trust  Companies 

by  the  institution  may  be  cited  one  or  two 
special  cases. 

The  late  Benjamin  Rose  left  an  estate  valued 
in  excess  of  $3,000,000  to  the  Citizens  Savings 
&  Trust  Company,  as  trustee  in  perpetuity,  and 
directed  the  trustee  to  organize  and  superintend 
an  institution  for  the  purpose  of  distributing  the 
entire  net  income  of  the  estate  to  deserving  old 
men  and  women.  By  this  arrangement  monthly 
payments  are  made  to  many  people,  enabling 
them  to  remain  in  their  own  home  instead  of 
having  to  go  to  some  charitable  institution. 

The  late  Robert  R.  Rhodes  left  an  estate 
valued  at  $2,000,000  the  bulk  of  which  was  left 
to  the  trust  company,  as  trustee  in  perpetuity, 
and  the  income  is  to  be  paid  to  various  hospitals 
and  charitable  organizations  in  Cleveland. 

From  an  institution  of  about  $8,000,000  of 
resources  twenty  years  ago,  the  Citizens  Sav- 
ings &  Trust  Company  has  grown  until  its 
latest  statement,  issued  on  the  last  day  of  June, 
1916,  showed  total  resources  of  $70,661,825.82, 
with  capital  of  $4,000,000,  surplus  and  undi- 
vided profits  of  $3,498,823,  and  deposits  of 
$62,962,790.32. 


New  England  Trust  Company  143 

J.  H.  Wade,  son  of  the  original  President  of 
the  Citizens  Savings  &  Loan  Association  is 
Chairman  of  the  Board  of  Directors.  H.  R. 
Newcomb,  who  was  President  from  the  time  of 
the  consolidation  in  1903  until  his  death  in  19 10, 
was  succeeded  at  that  time  by  D.  Z.  Norton. 

Boston  entered  the  trust  company  field  in 
1 87 1,  presenting  for  instant  public  approval 
the  New  England  Trust  Company,  which  had 
been  chartered  two  years  previously.  The 
Company's  offices  were  at  No.  76  Devonshire 
Street,  later  at  No.  85,  almost  directly  across 
the  street,  and  in  1906  a  handsome  building 
was  erected  at  the  corner  of  Milk  and  Devon- 
shire streets.  The  early  Presidents  were  Amos 
A.  Lawrence  and  Otis  Norcross,  followed  by 
Wm.  Endicott,  Jr.,  and  David  R.  Whitney. 
Since  19 12  James  R.  Hooper  has  acted  in  that 
capacity,  and  in  191 5  George  Wigglesworth 
became  Chairman  of  the  Board. 

The  growth  of  the  Company  has  been  con- 
stant and  the  progression  of  total  assets  since 
1876  shows:  in  that  year,  $6,000,000;  in  1886, 
$12,000,000;  in  1896,  $15,000,000;  in  1906, 
$18,000,000;  in  19 16,  $29,000,000. 


144       Story  of  Trust  Companies 

The  present  capital  is  $1,000,000,  the  surplus 
and  undivided  profits  $2,992,786.32. 

Entirely  in  line  with  earlier  endeavors  in 
the  same  city,  the  Philadelphia  Trust,  Safe 
Deposit  &  Insurance  Company  came  into 
corporate  existence  in  1869.  As  indicated  by 
the  title,  several  distinct  functions  were  contem- 
plated, and  not  until  191 5  was  the  name 
Philadelphia  Trust  Company  adopted. 

The  early  Presidents  were  J.  Livingston  Er- 
ringer  and  W.  L.  DuBois.  This  office  was  held 
by  Roland  L.  Taylor  in  1910  and  191 1,  by 
Samuel  L.  Heebner  in  19 12,  and  since  1913 
Thos.  S.  Gates  has  been  the  Company's  head. 
The  institution  is  a  strong  one.  Its  capital  of 
$1,000,000  now  carries  with  it  surplus  and  un- 
divided profits  of  $5,000,000,  and  the  growth  in 
assets  since  1906  has  been  from  a  total  of  $I2,- 
ooo,ooo  to  a  present  volume  of  over  $30,000,000. 

The  year  1869  also  saw  a  new  incorporation 
in  Chicago.  This  was  the  Union  Trust  Com- 
pany which  during  late  years  has  been  domiciled 
at  No.  7  South  Dearborn  Street,  corner  Madison 
Street,  its  earlier  home  having  been  at  No.  145. 
Back  in  1896,  under  the  presidency  of  S.  W. 


Illinois  Trust  &  Savings        145 

Ransom,  it  was  a  modest  concern  of  $500,000 
capital,  $900,000  surplus  and  undivided  profits, 
and  $4,500,000  of  total  resources  and  liabilities. 
Since  1905,  Frederick  H.  Ransom  has  been 
President  and  the  corresponding  figures  for 
June,  1916,  are  $1,500,000,  $1,600,000,  and 
$34,500,000,  respectively. 

The  great  Chicago  fire  of  October  9,  1871, 
played  sad  havoc  with  the  city's  financial 
possessions.  Most  of  the  banks  and  trust 
companies  there  were  equipped  with  vaults  of 
old-fashioned  types  of  construction,  and  the 
losses  in  cash  securities  and  records  were,  in 
some  instances,  complete.  For  many  days 
after  the  conflagration  was  ended  there  was  an 
entire  suspension  of  financial  activities,  and 
not  until  months  after  was  business  resumed 
on  anything  like  a  normal  basis. 

In  1873,  however,  the  newly  created  metro- 
polis of  the  West  saw  the  corporate  foundation 
laid  for  a  great  institution  known  as  the  Illinois 
Trust  &  Savings  Bank. 

This  concern  has  always  held  high  rank  among 
the  trust  companies  of  the  country.  As  far 
back  as  1896  its  report  showed  footings  of  no 


10 


146       Story  of  Trust  Companies 

less  than  $30,000,000;  in  1906  the  extraordi- 
nary total  of  $106,000,000  was  reached,  at  that 
time  the  largest  sum  of  resources  of  any  trust 
company;  to-day,  1916,  with  $5,000,000  of 
capital,  $11,000,000  of  surplus  and  undivided 
profits,  and  $128,000,000  of  total  liability,  it 
is  the  seventh  company  in  size  in  the  country. 
The  present  offices  are  in  a  substantial  banking 
house  at  No.  233  South  La  Salle  Street,  where 
for  over  twenty  years  past  John  J.  Mitchell  has 
devoted  himself  to  the  duties  of  President  of 
the  institution. 

In  the  late  summer  of  1873  came  a  severe 
panic  which  both  interrupted  existing  trust 
company  arrangements  and  offered  many  dis- 
couragements to  new  undertakings.  The 
troubles  of  that  period  were  precipitated  by 
public  distrust  of  the  Government's  financial 
policies ;  there  had  been  reckless  over-extensions 
among  the  railroads  and  other  corporations; 
speculative  tendencies  had  developed  to  a  degree 
previously  unheard  of.  When  the  crash  came 
in  Wall  Street,  the  chief  scene  of  the  difficulties, 
it  was  not  unnatural  that  some  of  the  trust 
companies  should  be  affected. 


Panic  of  1873  147 

During  that  summer  two  institutions  in 
what  is  now  Greater  New  York  were  forced  to 
suspend  for  short  periods.  In  one  instance 
it  was  claimed  that  the  management  was  lack- 
ing in  diligence  in  the  handling  of  certain  city 
funds,  the  newspapers  asserting  that  it  had 
not  acted  in  good  faith  in  the  surrender  to  out- 
siders of  some  large  quantities  of  securities. 
At  least  two  of  these  newspapers  had  libel  suits 
filed  against  them  before  matters  quieted  down 
and  the  company  was  able  to  resume  business. 

In  SeptemJDer,  1873,  began  a  series  of  Stock 
Exchange  failures  which  greatly  unsettled 
public  confidence.  Fisk  &  Hatch  of  New  York 
and  Jay  Cooke  &  Company  of  Philadelphia 
were  among  the  many  great  brokerage  houses 
to  go  to  the  wall.  The  closing  months  of  the 
year  witnessed  many  stirring  events  in  New 
York,  a  notable  instance  being  the  trial  and 
conviction  of  the  city  boss,  William  M.  Tweed. 
The  period  was  one  of  great  financial  distress 
and  of  constant  accusations  and  recriminations 
among  persons  high  in  public  authority,  but 
the  trust  company  embarrassments  of  1873 
were  short-lived  and  seem  now,  in  the  light  of 


148       Story  of  Trust  Companies 

minutes  and  other  records  which  have  been  pre- 
served, to  have  been  considerably  exaggerated 
in  the  press  accounts  of  that  year's  happenings. 

Returning  now  to  the  New  England  field, 
the  story  of  the  Boston  Safe  Deposit  &  Trust 
Company  illustrates  the  want  of  co-operation 
on  the  part  of  the  investing  public  which  the 
founders  of  many  prominent  trust  and  safe- 
deposit  companies  had  to  experience  and  over- 
come. Originally  incorporated  in  1867  by 
special  act  of  the  Legislature,  under  the  title 
Boston  Safe  Deposit  Company,  it  was  author- 
ized, by  amendment  in  1874,  to  assume  the 
present  corporate  name,  to  conduct  a  banking 
business,  and  to  act  as  registrar  of  stocks  and 
bonds  and  as  transfer  agent. 

Yet  it  was  not  until  June  i,  1875,  that  the 
Company  began  business,  confining  itself  to 
safe-deposit  transactions  until  July  2,  1876, 
when  a  banking  department  was  established. 
It  is  recorded  that  Edward  P.  Bond,  who  ob- 
tained the  charter,  actually  carried  the  docu- 
ment about  in  his  pocket  for  eight  years  trying 
to  interest  investors  in  the  possibilities  which 
he  foresaw  in  a  safe-deposit  business. 


Boston  Safe  Deposit  &  Trust    149 

The  original  capital  of  the  Company  was 
$200,000,  which  was  doubled  in  1876  after  one 
year's  business;  in  1890  it  was  increased  to 
$1,000,000,  which  remains  the  capital  at  the 
present  time. 

In  1877  the  Company  was  given  authority 
by  the  Legislature  to  act  as  trustee  under  will, 
and  in  1899  it  was  appointed  by  the  Bank  Com- 
missioner as  executor  under  wills,  as  adminis- 
trator of  estates  and  as  guardian  of  minors  and 
incompetents.  These  were  the  first  instances 
of  such  powers  being  granted  to  trust  companies 
in  the  Commonwealth.  The  Company  at  pres- 
ent holds  in  trust  over  $30,000,000,  the  largest 
amount  so  held  by  any  trust  company  in  Mas- 
sachusetts, and  the  deposits  of  its  banking 
department  have  increased  from  $500,000  in 
1877,  to  $16,000,000,  without  the  absorption 
of  any  other  institution. 

The  ojSices  and  vaults  of  the  Company  are 
located  in  its  own  modem  building,  No.  100 
Franklin  Street,  the  former  and  original  quar- 
ters having  been  at  No.  87  Milk  Street. 

The  Presidents  have  been  Francis  M.  John- 
son, 1875  to  1877;  Frederick  M.  Stone,  1877  ^o 


II 


150       Story  of  Trust  Companies 

1897;  William  E.  Putnam,  1897  to  1905;  Charles 
E.  Rogerson,  1905  to  date. 
The  growth  of  resources: 

1876—$  935,281.94  1896— I  9,034,758.94 

1886—  4,539,618.48  1906—  15,695,909.86 

1916 — $20,833,008.01 

The  present  capital  is  $1,000,000,  the  surplus 
and  undivided  profits  $3,216,378.13. 

Chartered  in  1873,  opened  for  business  in 
1875,  the  Central  Trust  Company  of  New  York, 
always  among  the  most  progressive  of  trust 
companies,  is  in  191 6  the  third  largest  in  the 
United  States.  In  the  beginning,  Henry  F. 
Spaulding  was  elected  to  the  presidency  and 
offices  were  opened  at  No.  14  Nassau  Street, 
which  were  occupied  until  1884.  The  Com- 
pany then  removed  to  the  building  directly 
opposite,  at  No.  15  Nassau  Street. 

It  was  at  about  this  time  that  Frederic  P. 
Olcott,  former  Comptroller  of  New  York  State 
( 1 878-1 879),  became  President  of  the  Company. 
In  1887  the  quarters  at  No.  15  Nassau  Street 
were  outgrown  and  a  new  location  was  chosen 
at  No.  54  Wall  Street  in  the  shadow  of  the  old 


Central  of  New  York  151 

Custom  House.  This  building  is  to-day  almost 
as  intimate  a  landmark  of  lower  New  York  as 
its  venerable  neighbor  across  the  street,  and 
it  has  been  the  home  of  the  Central  Trust 
Company  from  1887  to  the  present  time. 

In  1876,  one  year  after  commencing  business, 
the  Company  reported  resources  of  $5,263,302.50 
and  about  the  time  of  removal  to  the  present 
address,  in  July,  1887,  the  figures  were  $22,- 
521,975.59,  a  growth  of  over  seventeen  millions 
of  dollars. 

From  1896  to  1906  the  surplus  and  undivided 
profits  grew  from  $6,242,995  to  $15,214,974.99, 
while  the  total  resources  reached  $83,004,867.52, 
in  striking  testimony  of  the  methods  and  poli- 
cies of  Mr.  Olcott.  Upon  his  being  elected 
Chairman  of  the  Board  of  Trustees  in  1905, 
the  present  incumbent,  James  N.  Wallace, 
was  elected  President.  Mr.  Olcott  continued 
as  Chairman  of  the  Board  of  Trustees  until  his 
death  in  1909. 

The  capital  stock,  which  had  been  $1,000,000 
since  the  inception  of  the  Company,  was  in  1909 
increased  to  $3,000,000  by  means  of  a  dividend 
of  $2,000,000.     In  July,    191 6,   a  dividend  of 


152       Story  of  Trust  Companies 

$2,000,000  was  paid  to  the  shareholders,  at 
which  time  the  capital  stock  was  increased  to 
$5,000,000. 

As  of  June  30,  1916,  the  Company  reported 
surplus  and  undivided  profits  of  $18,258,793.74 
and  total  resources  of  $175,484,519,  Its  present 
holding  of  this  vast  aggregate  of  wealth  makes 
the  Company  third  in  size  in  New  York  City 
as  well  as  in  the  United  States. 

The  Central  Trust  Company  has  been  distin- 
guished at  all  times  as  an  institution  composed 
of  prominent  financiers.  The  late  J.  Pierpont 
Morgan  served  some  years  as  a  Trustee.  The 
late  John  S.  Kennedy  was  also  a  Trustee  until 
his  death.  The  Company  is  famous  for  the 
liberal  treatment  it  shows  its  officers  and 
employees,  old  and  new;  the  annual  Christmas 
gifts  are  fifty  per  cent,  of  the  year's  salaries. 
Since  19 14,  an  uptown  branch  has  been  main- 
tained at  Forty-second  Street  and  Madison 
Avenue. 


CHAPTER  XI 

1874  TO    1876.      FIRST  SUPERVISION.      EARLIEST 

STATISTICS 

A  LULL  ensued  between  1872  and  1881,  so 
far  as  new  trust  incorporations  were  concerned, 
but  within  this  period  two  notable  events  oc- 
curred. One  was  the  first  administering  any- 
where of  a  law  compelling  examinations  by 
State  authorities,  the  other  a  gathering  for  the 
first  time  of  any  figures  for  trust  companies 
worthy  the  name  of  statistics. 

Prior  to  the  year  1872  there  was  practically 
no  State  supervision  of  trust  companies.  Some 
of  the  companies,  in  compliance  with  their 
charters,  reported  to  the  courts,  while  others, 
by  virtue  of  their  character,  reported  with  the 
insurance  companies. 

In  the  year  mentioned  Connecticut  enacted 
a   supervisory   law   and   soon    afterwards   the 

153 


154       Story  of  Trust  Companies 

functions  of  the  trust  companies,  as  well  as  the 
differences  between  them  and  the  State  banks 
began  everywhere  to  be  better  understood. 
During  1874,  New  York  passed  laws  whereby 
trust  companies  came  under  the  supervision 
of  the  Banking  Department  (existing  since 
1851),  were  compelled  to  make  annual  reports 
to  the  Superintendent,  and  were  subjected  to 
yearly  examinations.  Ohio  enacted  a  trust 
company  law  three  years  later  but  annual 
examinations  were  not  authorized  until  1908. 
It  was  also  as  late  as  1908  before  the  Superin- 
tendent in  New  York  State  could  take  charge 
of  an  unsound  trust  company. 

Vermont  first  required  reports  in  1878,  and 
Louisiana  and  Maine,  in  1882  and  1883  re- 
spectively, were  the  next  to  take  the  step.  Of 
the  larger  States,  Illinois  followed  in  1887. 
Some  of  the  Massachusetts  companies,  under 
provisions  of  their  charters,  reported  to  the 
bank  commissioners  as  early  as  1870,  although 
the  Legislature  did  not  require  this  until  1888. 

Pennsylvania's  Legislature  was  as  late  as 
1 89 1  in  passing  regulative  laws.  Such  had  the 
confusion  been  in  this  State  that  back  in  1852 


Need  of  Control  155 

and  1853  only  one  of  the  State's  two  companies 
had  reported,  apparently  to  the  Legislature; 
while  as  late  as  1878,  six  reported  to  the  Auditor 
General,  three  to  the  Superintendent  of  Insur- 
ance, and  one  independently  of  any  department. 
In  California,  West  Virginia,  and  Colorado,  trust 
company  supervision  was  contemporaneous  with 
that  of  Pennsylvania. 

Thirty- three  years  after  the  legislation  in 
New  York,  that  is  in  1907,  a  count  of  the  States 
showed  that  forty-five  of  them  had  passed  trust 
company  laws,  though  in  the  majority  of 
cases  these  laws  were  almost  identical  with  those 
governing  State  banks,  some  prescribing  more, 
some  fewer,  requirements. 

The  searcher  of  public  documents  cannot  fail 
to  be  impressed  with  the  inconsistency  of  all 
this.  Until  a  date  nearly  a  hundred  years 
after  the  Nation's  birth  the  trust  companies 
were  really  so  many  free  lances.  How  valu- 
able would  the  record  be  now  if  we  could  look 
back  to  complete  figures  by  States  during  the 
early  years.  There  are  elaborate  old  docu- 
ments relating  to  almost  every  subject,  from 
legislative  junkets   on   the   River  Nile  to  the 


156       Story  of  Trust  Companies 

most  approved  methods  of  oyster  cultivation 
along  our  own  shores; there  have  been  governors' 
messages  printed  in  foreign  languages,  and 
great  illustrated  tomes  have  now  and  then 
appeared  on  subjects  like  pomology,  piscato- 
logy  and  paleontology;  but  scientific  control 
of  trust  companies  by  the  State  governments 
was  an  unheard-of  study  as  lately  as  forty-five 
years  ago. 

In  the  seventies  the  abuses  of  the  earlier 
years  began  over  again.  In  New  York  State, 
Governor  Cornell  ruled  in  a  veto  message,  as 
late  as  1881,  that  the  Bankers'  Life  Insurance 
&  Trust  Company  of  New  York,  incorporated 
by  special  charter  in  1871,  was  not  entitled  to 
change  its  title  by  eliminating  the  word  "Trust " 
therefrom.     He  remarked: 

"Diligent  inquiry  among  bankers,  trust 
companies  and  commercial  agencies  in  New 
York  has  afforded  no  information  as  to  the 
existence  or  operations  of  the  Company. 
It  would  seem  that  a  corporation  which  has 
been  so  prolific  of  legislation  should  not  be 
permitted  to  occupy  an  additional  space  in 
the  statutes  of  the  State,  at  least  until  it 


New  York  Companies  in  1874  157 

shall  have  made  for  itself  a  local  habitation 
and  a  name  by  which  it  can,  upon  inquiry, 
be  found.  The  failure  to  report  to  the  Bank- 
ing Department,  as  required  by  its  charter, 
is  another  reason  why  the  change  of  name 
should  not  be  assented  to  at  this  time." 

Just  how  a  condition  like  this  could  have 
existed  is  not  clear,  for  under  Chapter  324  of  the 
Laws  of  1874  of  New  York  State,  which  was 
entitled:  "An  act  relative  to  moneyed  corpora- 
tions, other  than  banks,  institutions  for  savings, 
and  insurance  companies,"  it  had  been  pro- 
vided that  every  trust,  loan,  mortgage 
security,  guaranty  or  indemnity  company  or 
association,  having  the  power  and  receiving 
money,  was  required  semi-annually  on  June 
30th  and  December  31st  in  each  year  to  make 
a  report  to  the  Banking  Department. 

This  statute,  as  already  stated,  compelled 
the  Superintendent  of  Banks  to  make  a  visit 
once  each  year  at  the  offices  of  the  corpora- 
tions thus  placed  under  his  authority,  and 
to  examine  their  condition.  As  of  the  end  of 
the  same  year  the  Superintendent  was  able 
to    report    what    was   then   a   very   imposing 


158       Story  of  Trust  Companies 

aggregate  of  capital  and  deposits  for  the  Empire 
State.     He  said: 

"Under  the  law  passed  at  the  last  session 
of  the  Legislature,  reports  were  made  on  the 
30th  of  June  last  by  twelve  moneyed  corpora- 
tions, variously  styled  trust,  or  loan,  or 
indemnity  or  guaranty,  or  mortgage  com- 
panies. These  reports  show  that  the  com- 
panies have  an  aggregate  capital  of  $11,752,- 
040.  Their  deposits  amounted  to  $38,479,764, 
a  sum  which  is  nearly  three-fifths  as  much  as 
the  entire  deposits  held  by  the  State  banks. 

"In  the  endeavor  to  procure  reports  from 
this  class  of  companies,  it  was  discovered 
that  many  of  them  which  have  been  incor- 
porated during  the  last  few  years  have  made 
no  organization,  while  some  others  which 
have  been  organized  have  languished  and 
failed  in  the  end.  It  is  believed  that  every 
company  which  is  subject  to  the  provisions 
of  the  law  mentioned,  is  embraced  in  the  re- 
ports which  are  elsewhere  given.  They  show 
the  several  companies  to  be  apparently  in  a 
sound  condition,  although  the  statement  of  one 
of  them  exhibits  an  impairment  of  capital. 

"During  the  present  year  the  examination 
of  these  companies  will  be  made  as  the  law 
provides." 


Views  of  Federal  Comptroller   159 

That  methods  of  supervision  were  needful, 
and  had  long  been  so,  was  clearly  pointed  out 
by  the  Comptroller  of  the  Currency  at  Wash- 
ington, at  the  beginning  of  1874. 

Commenting  upon  his  report  issued  at  that 
time,  the  Bankers  Magazine  presented  the  fol- 
lowing interesting  remarks  on  the  subject  of 
supervision : 

"The  Comptroller  alludes  to  the  trust  and 
loan  companies  which  have  grown  up  in  late 
years  and  now  assume  a  large  space  in  New 
York  City  and  in  various  cities  of  New  Eng- 
land. Properly  managed,  these  institutions 
are  not  only  useful  but  necessary.  They 
were  intended  as  repositories  for  trust  funds, 
for  accumulation  of  deposits  to  be  loaned  on 
mortgage,  and  for  investments  in  government 
loans,  in  other  words  as  Savings  Banks  on  a 
large  scale.  Recently  they  have  been  con- 
verted into  stock-jobbing  concerns,  appar- 
ently for  the  benefit  of  stock  operators  and 
in  large  sums ;  thereby  defeating  their  original 
objects  and  contributing  to  the  demoraliza- 
tion of  stock  speculators.  Call  loans  are 
among  the  active  causes  of  a  panic,  and  bank- 
ers handle  them  at  a  great  risk.  The  Comp- 
troller's views  are  as  follows: 


i6o      Story  of  Trust  Companies 

"'These  companies  are  actually  organized 
by  special  State  Statutes  in  the  large  cities. 
Their  capitals,  deposits,  and  business  are 
quite  large  in  amount.  Generally,  if  not 
always,  they  are  not  required  to  report  to 
the  State  authorities,  but  under  the  orders 
of  one  or  other  of  the  courts.  Some  of  these 
occur  at  long  intervals  and  are  probably 
published  in  the  newspapers,  but  even  when 
so  published  they  are  by  no  means  full,  and 
furnish  but  little  available  information.  For 
instance,  one  of  the  largest  of  these  institu- 
tions, has  published  but  one  report  in  a  year 
and  that  report  contains  only  a  statement  of 
its  assets,  without  any  mention  of  the  amount 
due  to  its  depositors  or  any  of  its  liabilities. 
The  bank  Superintendent  of  New  York  in  reply 
to  an  inquiry  in  reference  to  these  institutions 
says  (Under  date  of  31st  July,  1873) : 

"  '"The  trust  companies  of  New  York  are 
peculiarly  situated.  Some  are  under  the 
supervision  of  the  bank  department;  some 
are  under  the  control  of  the  Comptroller  of 
the  State,  but  the  great  majority  of  them  are 
under  no  sort  of  supervision.  This  class  of 
corporation  (meaning  the  last  described) 
has  multiplied  rapidly  during  the  last  few 
years.  I  am  not  able  to  furnish  a  copy  of 
the  charter  of  any  of  these  companies.'"" 


First  Comprehensive  Statistics  i6i 

The  New  York  Superintendent's  report  for 
1874  may  be  said  to  have  constituted  the  first 
public  showing  ever  made  by  a  banking  depart- 
ment of  the  aggregate  position  of  a  group  of 
trust  companies.  It  was  only  a  forerunner, 
however,  of  some  most  interesting  figures  soon 
to  be  presented  by  Comptroller  of  the  Currency, 
John  J.  Knox,  than  whom  no  person  in  public 
life  has  ever  contributed  more  to  the  complete- 
ness of  enduring  bank  statistics. 

In  the  Comptroller's  report  to  Congress  for 
1875-1876,  was  set  forth  the  following: 


Table    of    Aggregate    Resources   and    Liabilities    of 
Trust  and  Loan  Companies 

Resources:  1874-1875 

3S  "banks" 


Loans  and  discounts $65,900, 1 74 

Overdrafts 16,883 

United  States  bonds 2,086,842 

Other  stocks,  bonds,  etc 37,323,062 

Due  from  banks 1,837,605 

Real  estate 3,733.357 

Other  investments 2,880,342 

Expenses 92,894 

Cash  items 5,186,004 

Cash — legal — tenders,  bank-notes,  etc 3,833,012 

Total $122,890,175 

II 


i62       Story  of  Trust  Companies 


Liabilities:  1874-1875 

35  "banks'^ 


Capital  stock $21,854,020 

Surplus  fund 6,967,693 

Undivided  profits 582,867 

Dividends  unpaid 1 8,92 1 

Deposits 85.025,371 

Due  to  banks 121,441 

Other  liabilities 8,319,862 

Total $122,890,175 

Accompanying  this  exhibit  the  same  accounts 
were  shown  in  detail  by  States,  the  aggregates 
being: 

Massachusetts 5  "banks" $  9,033,335 

Rhode  Island i         "        6,694,862 

Connecticut 10         "        5,711,438 

New  York 12         "        69,654,948 

Pennsylvania 7         "        31.795. 592 


Total $122,890,175 

In  a  footnote  was  added  the  fact  that: 

"The  financial  editor  of  the  Chicago  Tribune 
states  that  the  liabilities  of  five  trust  com- 
panies in  the  City  of  Chicago  on  June  30, 
1875,  were:  Capital  $2,500,000;  surplus, 
$725,000;  deposits,  $5,688,574.  But  this 
statement,     being     unaccompanied     by     the 


1875  Aggregates  163 

resources  of  these  banks  could  not  be  made 
available  for  the  purpose  of  this  report." 

It  was  also  explained  that  in  New  York  State 
the  deposits  were  inclusive  of  "$3,696,344  of 
money  in  trust." 

The  Comptroller  discussed  the  figures  of  the 
trust  companies  with  care  and  explained  that: 

"among  the  States  from  which  either  no 
reports  were  received,  or  such  as  could  not 
be  utilized,  are  the  great  States  of  Illinois, 
Ohio,  Virginia,  Louisiana,  Missouri,  and 
many  others." 

•  At  this  point,  forty  years  ago  the  little  story 
of  thirty-five  reporting  trust  companies  must 
have  made  small  reading,  in  contrast  with  the 
Comptroller's  showing  of  other  kinds  of  institu- 
tions, of  which  there  were: 

2086  National  Banks  footing  for 51,823,000,000 

674  Savings  Banks  footing  for 896,000,000 

551  State  Banks  footing  for 272,000,000 

reporting  altogether  almost  three  billions  of 
dollars,  or  about  twenty-five  times  the  modest 
122  millions  of  trust  company  resources. 


164       Story  of  Trust  Companies 

The  Comptroller  made  no  mention  of  a  con- 
cern located  in  the  District  of  Columbia  having 
the  title  of  "Real  Estate  Loan  &  Trust  Com- 
pany." This  institution  seems  to  have  existed 
in  Washington  from  1877  to  1880.  Its  capital 
was  $100,000,  and  it  issued  "real  estate  bonds 
secured  by  deeds  of  trust"  on  property  as 
far  away  as  Tennessee.  A  specimen  "bond" 
is  here  shown  in  fac- simile.  Readers  familiar 
with  the  appearance  of  national  bank  currency 
in  years  gone  by  will  detect  a  similarity.  In 
fact,  the  size,  form  and  texture  of  these  "bonds " 
were  all  strikingly  in  keeping  with  Uncle  Sam's 
own  demand  bank  obligations  of  the  same 
period. 

During  the  five  years  following  the  issuance 
of  the  report  above  described  the  growth  of  the 
companies,  as  stated  by  the  Comptroller  of 
the  Currency,  came  almost  to  a  standstill.  The 
Rhode  Island  Hospital  Trust  Company,  which 
has  been  previously  sketched,  continued  to 
appear  in  the  Comptroller's  tabulations,  but 
in  every  other  State,  between  1876  and  1880, 
there  were  decreases  in  the  numbers  of  the 
companies  and  even  a  slight  falling  off  in  the 


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A  Slowing  Down  in  Activities   165 

summaries  of  their  aggregate  resources.     The 
items  and  totals  thereof  were: 

1876 38  companies $127,646,179 

1877 39  "  123,612,499 

1878 35  "  110,843,603 

1879 32  "  111,809,936 

1880 30  "  126,869,673 

The  Federal  Comptroller's  reports  were  not, 
of  course,  based  upon  complete  information  from 
all  State  sources,  but  a  searching  of  current 
and  modern  records  would  make  it  appear  that 
during  the  years  1877  and  1878,  not  a  single 
trust  company  incorporation  was  effected  in 
the  entire  United  States. 

It  seems  strange  that  directly  upon  the  ad- 
ministering of  the  new  law  at  Albany,  and  the 
issuance  of  some  live  figures  at  Washington, 
there  should  have  been  displayed  such  inactivity 
among  the  old  concerns,  with  an  utter  lack  of 
interest  in  the  formation  of  new  ones.  Yet  it 
is  a  fact  that  at  this  period  trust  company 
activities  hesitated,  and  the  tide  of  their  progress 
ran  at  a  very  low  ebb. 


CHAPTER  XII 

1881     TO    1888.      INCREASING    NUMBERS    OF 
COMPANIES 

The  onward  march  was  resumed  in  the  early 
eighties,  new  incorporations  occurring  in  many- 
quarters.  The  next  of  the  very  large  companies 
arose  in  New  York  City,  when  on  December  i, 
1 88 1,  the  Metropolitan  Trust  Company  of  the 
City  of  New  York  opened  modest  quarters  at 
No.  41  Pine  Street. 

The  first  president  of  the  Company  was 
General  Thomas  Hillhouse,  who  had  been  serv- 
ing as  Assistant  Treasurer  of  the  United  States, 
with  headquarters  at  the  New  York  Sub- 
Treasury.  General  Hillhouse  had  a  notable 
career  as  a  banker  and  State  and  Government 
ofhcial.  Previous  to  assuming  his  duties  at 
the  Sub-Treasury,  he  had  served  as  Adjutant- 
General  under  Governor  E.  D.  Morgan  during 

166 


Metropolitan  of  New  York      167 

the  troublous  times  of  the  Civil  War,  and  had  a 
term  as  Comptroller  of  the  State  of  New  York. 
He  had  also  been  a  member  of  the  New  York 
State  Senate. 

The  Company  at  its  formation  had  an  author- 
ized capital  stock  of  $  1,000,000  with  authority 
to  increase  to  $2,000,000.  It  continued  to 
operate  under  the  smaller  capitalization,  how- 
ever, until  January  30,  1903,  when  following  the 
successful  termination  of  a  series  of  important 
negotiations,  the  Atlantic  Trust  Company, 
which  in  former  years  had  been  one  of  the 
strongest  of  Wall  Street  institutions,  was 
merged  into  the  Metropolitan  Trust  Company. 
In  order  to  bring  about  this  union,  the  capital 
stock  of  the  Metropolitan  Trust  Company 
was  increased  to  $2,000,000  and  in  the  merger 
two  shares  of  Atlantic  Trust  Company  stock 
were  exchanged  for  one  share  of  Metropolitan 
Trust  Company  Stock. 

Shortly  after  its  beginnings  on  Pine  Street, 
the  offices  of  the  Metropolitan  were  moved  to 
No.  17  Nassau  Street,  on  the  site  of  the  present 
Equitable  Life  Building,  and  thence  a  removal 
occurred  afterwards  when  a  change  was  made 


i68       Story  of  Trust  Companies 

to  a  more  advantageous  location  in  the  Mills 
Building  at  No.  35  Wall  Street.  The  banking 
quarters  at  the  latter  address  were  continued 
until  the  Company  went  to  its  own  building  at 
No.  37  Wall  Street,  in  1888.  The  location  of 
the  offices  was  once  more  changed  in  1904,  to 
the  Atlantic  Mutual  Insurance  Company  Build- 
ing at  the  corner  of  Wall  and  William  streets, 
where  they  are  now  maintained. 

Upon  the  retirement  of  General  Hillhouse  in 
1898,  General  Brayton  Ives  was  chosen  presi- 
dent, and  served  until  19 12,  when  George  C. 
Van  Tuyl,  Jr.,  took  office.  Mr.  Van  Tuyl  was 
formerly  president  of  the  Albany  Trust  Com- 
pany and  had  been  appointed  Superintendent 
of  Banks  under  Governor  Dix,  in  191 1.  During 
his  term  at  the  head  of  the  Banking  Department, 
Governor  Dix  appointed  the  Van  Tuyl  Com- 
mission which  was  charged  with  the  responsible 
duty  of  revising  the  State's  banking  laws. 

The  growth  of  total  assets  of  this  Company 
has  been  steady  and  consistent.  In  1886  there 
were  reported  $5,787,174.20;  in  1896,  $10,763,- 
138.50;  in  1906,  $35,470,279.90;  and  in  1916, 
$80,584,022.85,   while   surplus    and    undivided 


Title  Guarantee  &  Trust        169 

profits  show  an  increase  of  over  five  millions 
of  dollars  from  1896  to  date. 

In  1883  appeared  the  Title  Guarantee  &  Trust 
Company  of  New  York.  Its  beginnings  were 
on  the  eighth  floor  of  No.  2  Wall  Street,  using 
two  hundred  feet  of  floor  space. 

In  a  recent  magazine  article,  Clarence  H. 
Kelsey,  who  has  been  President  of  the  Company 
almost  from  the  beginning,  says  of  those  early 
days: 

"Our  address  was  all  that  could  be  desired, 
but  the  elevators  stopped  running  shortly 
after  six  o'clock,  and  if  my  work  required  me 
to  return  after  dinner,  I  had  to  climb  seven 
flights  of  stairs.  When  I  compare  these 
Spartan  beginnings  with  the  facilities  of  the 
ten  story  building  on  Broadway  now  owned 
and  occupied  by  us,  I  am  satisfied  that  we 
have  accomplished  the  thing  we  set  out  to  do 
• — to  create  a  business  by  providing  a  title- 
insurance  service  of  a  type  which  would  be 
accepted  as  indispensable  in  local  real  estate 
transactions. 

"When  our  fight  began,  we  had  many 
hard  problems  to  solve.  The  Register's 
office  contained  deeds,  mortgages,  and  other 


I/O       Story  of  Trust  Companies 

real  estate  instruments  covering  a  period  of 
more  than  three  hundred  years.  These 
were  recorded  chronologically  and  indexed 
under  the  names  of  the  parties  to  the  in- 
struments." 


Accordingly,  the  Company  set  out  to  abstract 
the  essential  portions  of  all  recorded  instruments 
and  to  separate  and  index  them  according  to 
locality.  Antagonism  developed  from  the  first 
on  the  part  of  the  great  law  firms  which  then 
controlled  the  real  estate  conveyancing  busi- 
ness, and  of  the  Register  and  the  official  search- 
ers who  drew  large  incomes  from  their  plants, 
and  from  their  personal  knowledge  of  the  very 
confused  sets  of  records  which  existed  in  public 
offices.  Years  of  diplomacy,  litigation,  and 
hard  work  ensued  but  as  time  went  by  the 
records  were  copied,  indexed,  and  ready  to  use. 
By  degrees  standard  rates  w^ere  made  covering 
the  examination  of  titles,  all  searches,  and  poli- 
cies of  title  insurance.  These  rates  were  well 
below  the  fees  previously  charged  by  the  law 
offices.  Later  the  organization  was  made  to 
cover  a  business  getting   department;   clients 


Expertness  in  Title  Work      171 

were  furnished  with  purchase  money  mortgages 
to  help  them  complete  their  purchases;  an 
energetic  band  of  young  attorneys  was  gathered 
and  trained  to  expertness  in  the  matter  of  title 
examination  and  closing;  speed  was  developed 
to  the  point  of  cutting  down  the  time  of  exam- 
ining a  title,  which  before  the  days  of  the  Com- 
pany had  taken  from  perhaps  thirty  to  sixty 
days,  so  that  now  the  claim  is  made  that  the 
Company  can  take  care  of  almost  any  new  title 
in  a  week  or  less  and  of  a  re-examination  in 
twenty-four  hours.  Eventually  the  important 
business  of  selling  guaranteed  mortgages  was 
developed  to  a  degree  unequaled  by  the  record 
of  any  other  similar  concern.  The  Company 
from  the  beginning  has  been  a  firm  believer  in 
publicity.  To-day  it  is  without  doubt  the 
most  widely  advertised  trust  company  in  the 
country,  using  newspaper  space,  pamphlets, 
cards  in  the  trolley  cars,  elevators,  and  subway 
trains,  and  annually  distributing  150,000  copies 
of  an  attractive  calendar.  The  Company's 
total  resources  in  1886  were  less  than  $800,000. 
In  1896,  they  amounted  to  $5,877,352.78,  and 
on  June  30,  1906,  to  $46,675,307.69,  while  on 


1/2       Story  of  Trust  Companies 

the  same  day  ten  years  later  they  were  reported 
at  $51,890,767.66. 

In  1903,  the  Company  absorbed  the  Manu- 
facturers Bank  of  Brooklyn,  which  is  to-day  one 
of  the  Company's  branches.  In  1896,  the  capi- 
tal stock  was  $2,500,000;  it  is  now  $5,000,000. 
The  surplus  and  undivided  profits  have  grown 
in  the  last  ten  years  from  less  than  $7,000,000 
to  upwards  of  $12,000,000.  With  about 
$33,000,000  of  deposits,  the  Company  has 
recently  made  the  impressive  statement  that: 
"For  each  $100  of  our  customers'  money, 
we  have  in  addition  more  than  $50    of    our 


own." 


Philadelphia's  leading  title  company  dates 
from  1885,  although  the  recording  system  for 
deeds  has  existed  in  Pennsylvania  since 
1682,  when  the  first  act  on  the  subject  was 
passed.  Among  the  acts  and  laws  of  the 
General  Assembly  of  the  Province  of  Penn- 
sylvania, 1 7 14-17 15,  "being  the  First  Year 
of  the  Reign  of  His  present  Majesty  King 
George  over  Great  Britain,  France  and  Ire- 
land, etc.,"  was  the  Recording  Act  of  May 
28,  1715: 


Pennsylvania  Title  Records      173 

"There  shall  be  an  office  of  record  in  each 
county  of  this  province,  which  shall  be  called 
and  styled  the  Office  for  Recording  Deeds, 
and  the  Recorder  shall  provide  parchment, 
or  good  large  books  of  royal  or  other  large 
paper,  well  bound  and  covered,  wherein  he 
shall  record,  in  a  fair  and  legible  hand,  all 
deeds  and  conveyances  which  shall  be  brought 
to  him  for  that  purpose." 

Other  subsequent  acts  provided  that  recorded 
deeds  and  mortgages  should  be  indexed,  and 
that  such  entry  "shall  be  notice  to  all  persons." 
The  above  provisions  have  been  continuously 
carried  out  to  the  present  day,  the  only  innova- 
tion being  that  the  prescribed  "fair  and  legible 
hand"  has  been  supplanted  by  the  legible 
typewriter. 

It  was  not  until  1874,  that  the  Pennsylvania 
Legislature  authorized,  by  its  general  "Corpora- 
tion Act,"  the  incorporation  of  companies  for 
"the  insurance  of  owners  of  real  estate,  mort- 
gages, and  others  interested  in  real  estate,  from 
loss  by  reason  of  defective  titles,  liens,  and 
incumbrances."  Prior  to  this  Act  (from  1836 
to  1874),  a  few  Philadelphia  companies  had  been 


174       Story  of  Trust  Companies 

chartered  with  trust  powers,  but  without  title 
insurance  powers. 

The  first  title  company  chartered  under  this 
act  was  The  Real  Estate  Title  Insurance  & 
Trust  Company,  chartered  in  1876.  Gradually 
overcoming  the  local  conservatism  and  opposi- 
tion of  conveyancers  and  conveyancers'  counsel, 
the  system  of  insurance  of  titles  made  its  way 
by  inherent  merit,  and  in  1885,  a  second  com- 
pany was  incorporated,  The  Land  Title  & 
Trust  Company. 

It  began  business  in  1885,  in  a  rented  room 
at  No.  621  Chestnut  Street,  and  within  three 
years  erected  a  large  office  building  at  No.  608 
Chestnut  Street.  Within  ten  years  the  increase 
of  its  business,  and  the  j)revision  that  business 
would  in  the  future  invade  the  neighborhood  of 
the  new  City  Hall,  at  Broad  and  Market  Streets, 
resulted  in  the  purchase  by  the  Company 
of  a  new  central  site  at  the  southwest  corner 
of  Broad  and  Chestnut  Streets,  and  the  erection 
of  offices,  with  ample  plant  and  safe  deposit 
facilities.  In  1903,  this  building  was  supple- 
mented with  an  adjoining  big  brother  of  twenty- 
two  stories,  into  the  entire  first  floor  of  which 


Land  Title  of  Philadelphia       175 

the  Company's  offices  have  overflowed.  That 
more  than  182,250  title  policies,  and  over 
155,000  certificates  of  search  have  been  issued 
by  The  Land  Title  &  Trust  Company  down 
to  August,  1916,  is  evidence  of  the  extent  of  the 
business.  The  losses  by  payment  of  indemnity 
for  defects  in  title,  undiscoverable  or  undiscov- 
ered at  the  time  of  issuing  the  guarantees, 
while  a  small  percentage,  are  in  the  aggregate 
a  multitude. 

During  the  first  ten  years  of  the  Company's 
existence,  the  banking  department  was  some- 
what subordinated  to  that  of  title  insurance, 
and  in  1896,  the  resources  were  less  than 
$4,000,000.  In  the  next  decade,  how- 
ever, broadening  activities  in  the  former  field 
were  evidenced  by  assets  of  $15,226,529.04,  and 
at  the  time  of  this  writing,  $21,184,939.52  are 
shown. 

To  care  for  this  expanding  volume  of  business 
the  original  capital  of  $1,000,000  was  doubled 
in  1904,  and  the  surplus  was  gradually  increased 
until  it  is  now  $5,000,000. 

The  Company  has  had  three  presidents, 
Charles  Richardson,  August,  1885  to  November, 


176       Story  of  Trust  Companies 

1887;  Nathaniel  E.  Janney,  to  November, 
1 891;  and  William  R.  Nicholson,  serving  since 
that  time. 

Another  important  undertaking  in  the  field 
of  title  insurance  and  trust  business  in  New 
York  occurred  four  years  later,  in  1887,  when 
the  Lawyers  Title  Insurance  Company  was  or- 
ganized and,  as  the  name  implied,  undertook  a 
business  of  title  insurance  with  lawyers,  until 
1900,  when  its  scope  was  extended  to  cover  the 
entire  field  of  title  examination  and  insurance. 
The  original  capital  was  $500,000.  In  1905, 
trust  company  powers  were  acquired,  the 
Central  Realty  Bond  &  Trust  Company  was 
absorbed  and  the  name  was  changed  to  Law- 
yers Title  Insurance  &  Trust  Company;  it  so 
remained  until  191 5,  when  upon  taking  over 
the  Home  Trust  Company  of  Brooklyn,  the 
present  name.  Lawyers  Title  &  Trust  Company, 
was  adopted. 

The  first  offices  of  the  Company  were  located 
in  the  old  Equitable  Building,  No.  120  Broad- 
way, and  afterwards  in  larger  quarters  at  No. 
37  Liberty  Street,  from  w^hich  in  1908  the 
Company  moved  to  its   new  building  at  No. 


Fidelity  of  Newark  177 

160  Broadway.  There  are  branch  offices  at 
No.  44  Court  Street,  and  No.  188  Montague 
Street,  Brooklyn. 

The  founder  and  first  president  was  Edwin 
W.  Coggeshall,  who  continues  to  guide  the 
prosperous  course  of  the  Company  as  Chairman 
of  the  Board  of  Directors,  having  in  191 5  been 
succeeded  in  the  presidency  by  Louis  V.  Bright. 

The  capital  stock  in  191 6  was  reported  at 
$4,000,000;  the  surplus  and  undivided  profits 
at  $5,263,000,  and  the  total  resources  at  $31,135, 
000.  This  last  figure  was  a  growth  of  nearly 
$12,000,000  during  ten  years  past. 

New  Jersey  had  for  years  been  the  home  of 
several  important  trust  companies,  when  in 
1887  a  new  institution  appeared  in  Newark. 
Its  able  and  progressive  management  soon  gave 
it  a  conspicuous  position,  and  for  years  it  has 
been  conceded  to  be  the  largest  and  strongest 
of  such  institutions  in  the  State.  It  began 
business  under  the  name  of  the  Fidelity  Title 
&  Deposit  Company  which,  however,  was  soon 
changed  to  Fidelity  Trust  Company. 

The  institution  was  opened  on  May  i, 
1887,  under  a  charter  granted  February  14th 


178       Story  of  Trust  Companies 

of  the  same  year.  Its  original  capital  was 
$200,000,  which  has  since  been  increased  to 
$3,000,000,  in  addition  to  which  the  institution 
has  a  surplus  of  $2,000,000,  and  undivided 
profits  of  over  $1,000,000.  In  1901,  its  total 
resources  were  about  $8,000,000,  while  at  the 
present  time,  191 6,  the  Company  reports  more 
than  $30,000,000. 

There  have  been  two  presidents,  the  first, 
Thomas  T.  Kinney,  and  the  present  incumbent, 
Uzal  H.  McCarter.  During  the  last  ten  years, 
the  Fidelity  has  acquired  the  following  insti- 
tutions: Newton  Trust  Company,  Newton 
N.  J.;  Essex  County  Trust  Company,  and  its 
branch.  East  Orange,  N.  J.;  Union  County 
Trust  Company,  Elizabeth,  N.  J.;  New  Bruns- 
wick Trust  Company,  New  Brunswick,  N.  J.; 
and  Red  Bank  Trust  Company,  Red  Bank,  N.  J. 

The  bid  price  of  the  Company's  stock  in 
1906  was  750,  and  dividends  of  thirty  per  cent, 
were  declared.  With  $2,000,000  capital,  and 
$7,500,000  in  surplus  and  undivided  profits, 
the  Fidelity's  capitalization  was  readjusted  in 
1915.  After  special  cash  and  stock  dividends 
amounting    to   $7,500,000   had    been    declared 


Industrial  of  Providence         179 

and  paid,  the  capital  was  increased  to  $3,000,000, 
upon  which  the  institution  now  pays  20 
per  cent,  dividends.  This  year,  19 16,  it  also 
paid  an  extra  dividend  of  10  per  cent.  At 
the  present  time  its  new  stock  is  quoted  at  450. 

Rhode  Island's  largest  trust  company  was 
incorporated  under  the  title  Industrial  Trust 
Company,  on  June  9,  1886,  and  formally 
opened  for  business  in  Providence  in  August  of 
the  following  year. 

Rooms  in  Custom  House  Street  were  occupied 
until  the  completion  of  pennanent  quarters 
in  the  Exchange  Bank  Building,  Westminster 
and  Exchange  Streets  and  in  December,  1887, 
the  Company  took  possession. 

Colonel  Samuel  P.  Colt  was  the  first  Presi- 
dent, succeeded  after  twenty  years  of  service, 
in  1907,  by  Cyrus  P.  Brown.  Colonel  Colt, 
since  19 13,  has  been  Chairman  of  the  Board. 
In  1912,  Colonel  H.  Martin  Brown,  the  present 
managing  executive  became  President.  The 
Company  has  since  1894  occupied  its  own  build- 
ing, a  nine  story  structure  erected  partly  on 
the  site  of  the  old  Atlantic  Insurance  Building, 
at  Westminster  and  Exchange  Streets.     It  now 


i8o       Story  of  Trust  Companies 

sustains  eight  branches  in  adjoining  cities  and 
towns. 

The  original  capital  of  $500,000  has  been 
increased  from  time  to  time  and  now  stands  at 
$3,000,000,  with  surplus  and  undivided  profits 
of  $4,700,000,  as  against  $326,000  in  1896. 
The  Company's  total  resources  have  grown 
from  $6,416,573  in  1896,  and  $50,514,749  in 
1906,  to  $65,438,423.59  at  the  present  time. 

Among  some  prominent  New  Yorkers  who 
have  served  on  its  directorate  may  be  mentioned 
Levi  P.  Morton,  James  Stillman,  George  F. 
Baker,  Thomas  F.  Ryan,  Elbridge  T.  Gerry, 
and  Jacob  H.  Schiff. 

The  Franklin  Trust  Company  was  organized 
by  the  late  Abicl  Abbot  Low  and  a  group  of 
other  prominent  Brooklyn  men,  and  commenced 
business  at  No.  186  Remsen  Street,  Brooklyn, 
on  August  I,  1888,  with  a  capital  of  $500,000, 
increased  a  year  later  to  $1,000,000. 

In  1892  the  Company  moved  to  the  hand- 
some office  building  which  it  had  erected  at  the 
comer  of  Montague  and  Clinton  Streets,  and 
also  established  the  Franklin  Safe  Deposit 
Company  which  it  controls. 


The  Franklin  of  Brooklyn       i8i 

In  1904  the  control  of  the  Safe  Deposit 
Company  of  New  York  was  obtained,  and  a 
branch  of  the  Trust  Company  was  started 
over  the  office  of  the  Safe  Deposit  Company 
at  No.  140  Broadway.  This  branch  is  now 
located  at  No.  46  Wall  Street. 

Besides  the  main  office  at  No.  166  Montague 
Street  the  Trust  Company  now  maintains  three 
Brooklyn  branches,  one  at  No.  569  Fulton 
Street,  near  Flatbush  Avenue,  one  in  the  Walla- 
bout  Market,  and  one  in  the  Navy  Y.  M.  C.  A. 
Building  on  Sands  Street,  the  last  having 
been  opened  for  the  convenience  of  sailors  in 
the  United  States  Navy.  In  191 1  the  Company 
was  elected  to  full  membership  in  the  New  York 
Clearing  House  Association.  The  Company 
has  a  large  individual  trust  business  in  Brooklyn 
and  has  acted  as  executor  and  trustee  for  many 
of  Brooklyn's  prominent  citizens. 

The  institution  has  always  been  progressively 
advertised,  and  its  frequent  quoting  of  the 
maxims  of  Benjamin  Franklin  has  been  an 
effective,  because  humanly  interesting,  scheme 
of  publicity. 

On  December  31,  1896,  nine  years  after  the 


1 82  .    Story  of  Trust  Companies 

Company's  inception,  the  total  resources  were 
$7,000,000;  ten  years  ago  the  aggregate  was 
$18,000,000;  on  June  30,  1916,  the  $25,000,000 
mark  was  passed. 

Edwin  Packard,  was  the  first  President, 
serving  until  1891,  when  he  was  succeeded  by 
George  H.  Southard.  In  1908,  Arthur  King 
Wood,  the  present  incumbent,  was  elected. 

The  mention  of  Mr.  Wood's  name  is  a  re- 
minder of  another  trust  company  official  whose 
term  of  service  began  almost  one  hundred  years 
ago.  This  was  his  great-grandfather,  John 
King,  Assistant  Secretary  of  the  old  Farmers 
Fire  Insurance  &  Loan  Company,  in  the  early 
twenties  of  the  past  century.  Later  he  became 
the  Company's  Secretary  and  labored  in  that 
capacity  for  many  years.  Mr.  King  was  a  strict 
Quaker;  he  always  objected  to  having  his  por- 
trait painted,  and  no  likeness  of  him  is  known  to 
exist.  About  the  year  1835  he  had  a  premoni- 
tion that  he  was  about  to  die  and  as  the  result 
resigned  his  office  and  settled  up  his  affairs, 
passing  away  in  December  of  that  year,  just 
at  the  time  when  the  great  fire  in  New  York 
was  raging. 


CHAPTER  XIII 

1889     TO    1890.      ADDITIONAL    NEW     COMPANIES 

There  were  several  important  incorpora- 
tions during  the  year  1889.  In  a  description 
of  these,  two  immense  institutions  of  the  present 
day  make  their  entry  into  our  story;  one  in 
New  York,  the  other  in  Pittsburgh. 

In  that  year  the  New  York  Trust  Company 
began  business  under  the  title  of  New  York 
Security  &  Trust  Company. 

The  offices  were  at  No.  46  Wall  Street, 
when,  in  1904,  the  Continental  Trust  Company 
of  the  City  of  New  York  was  absorbed.  This 
latter  institution,  whose  President  was  Otto  T. 
Bannard,  had,  at  the  time  of  the  merger,  total 
resources  of  over  $20,000,000,  its  share  capital 
being  $1,000,000. 

The  New  York  Security  &  Trust  Company's 
President,   In   1904,   was  Charles   S.  Fairchild 

183 


184       Story  of  Trust  Companies 

who  had  formerly  held  the  high  office  of  Secre- 
tary of  the  Treasury  under  President  Cleve- 
land. At  this  time  the  total  resources  were 
$35,000,000.  The  enlarged  Company  had 
$3,000,000  of  capital  stock  thereafter  and  Mr. 
Bannard  became  the  President.  The  commo- 
dious offices  of  the  former  Continental  Trust 
Company  at  No.  26  Broad  Street  were  then 
chosen  as  the  home  of  the  merged  institutions. 

In  1906,  two  years  after  the  events  described 
above,  the  New  York  Trust  Company  had 
assets  of  $59,730,496.58,  and  the  surplus  and 
undivided  profits  were  $10,552,011.16.  In  1916 
the  totals  were  $94,457,922.23  and  $11,372,284.- 
16  respectively. 

Mortimer  N.  Buckner  is  now  President  of 
the  Company,  having  been  elected  in  January, 
1916. 

Twenty-seven  years  ago  a  group  of  Pitts- 
burgh men,  headed  by  A.  W.  Mellon,  subscribed 
$125,000  of  trust  company  capital  and  opened 
an  institution  for  business  in  the  Fidelity 
Building,  No.  121  Fourth  Avenue.  Two  years 
later  the  capital  was  doubled,  but  by  1896  the 
aggregate  of  capital,  surplus,   and  deposits  of 


Union  of  Pittsburgh  185 

the  young  institution,  known  as  the  Union 
Trust  Company  of  Pittsburgh,  was  less  than 
half  a  million  of  dollars.  Where,  imless  in  a 
city  of  such  achievements  as  that  in  which  this 
enterprise  began,  would  it  be  expected  to  find 
at  the  end  of  twenty  years  an  accumulation  of 
more  than  two  hundred  times  the  amount  of 
wealth  reported  after  seven  years  of  initial 
operations?  For  the  Union  Trust  Company, 
on  June  30,  191 6,  was  one  of  eleven  concerns 
in  the  country  having  over  one  hundred  milhons 
of  dollars  of  resources. 

Upon  its  directorate  are  such  well-known 
nam.es  as  those  of  Henry  C.  Frick  and  Philander 
C.  Knox. 

With  the  tremendous  growth  of  Pittsburgh's 
industries,  the  Company  has  thrived  and  en- 
larged during  all  the  years,  its  one  hundred  and 
one  millions  of  dollars  of  resources  being  about 
double  the  sum  reported  ten  years  ago,  and 
representing  at  the  present  time  over  one 
seventh  of  the  total  bank  and  trust  company 
resoiu"ces  of  Pittsburgh.  The  present  capital 
stock  is  $1,500,000,  the  surplus  and  undivided 
profits  $34,000,000. 


1 86       Story  of  Trust  Companies 

The  shares  are  one  hundred  dollars  par,  their 
present  book  value  about  $2375  each,  and  the 
market  quotation  much  higher.  The  various 
dividends  paid  during  the  past  year,  down  to 
June  30,  1 91 6,  have  amounted  in  the  aggregate 
to  146  per  cent,  upon  the  capital. 

The  Company's  offices  at  this  writing  are 
at  No.  335  Fourth  Avenue,  where  since  1900 
H.  C.  McEldowney  has  been  President,  having 
at  that  time  succeeded  J.  S.  McKean. 

Back  in  1889,  when  Los  Angeles  was  a  city 
of  fifty  thousand  inhabitants,  the  Security  Trust 
&  Savings  Bank  was  started  upon  an  eventful 
career.  Its  organizers  subscribed  to  $29,000 
of  capital  and  established  headquarters  for  the 
new  project  in  one  small  room  in  the  Wiel 
Building  at  No.  148  South  Main  Street.  The 
bank  was  organized  by  J.  F.  Sartori  who  still 
directs  its  affairs  as  President;  M.  S.  Hellman, 
Vice-President,  and  W.  D.  Longyear,  Cashier, 
became  affiliated  with  the  institution  soon 
after  its  organization.  In  1896,  under  the  name 
of  the  Security  Savings  Bank,  the  office  was 
moved  to  the  corner  of  Main  and  Second 
Streets,  with  an  enlargement  of  these  quarters 


A  Los  Angeles  Institution      187 

following  in  two  years.  Its  remarkable  growth 
was  partly  due  to  the  great  progress  of  the 
West  about  this  time.  By  1900  the  resources 
were  $2,000,000,  in  1902  almost  $4,000,000, 
and  in  1904  over  $10,000,000. 

One  of  the  factors  in  the  institution's  growth 
was  its  absorptions  of  various  other  concerns. 
In  1904  the  Main  Street  Savings  Bank  was 
acquired,  it  having  been  started  the  same  year 
as  the  Security.  Along  with  a  change  to  the 
Hellman  Building  in  the  same  year,  came  the 
absorption  of  the  Los  Angeles  Savings  Bank, 
founded  in  1887.  At  the  time  of  the  1907  panic 
the  Security  took  over  the  interests  of  the 
Southern  California  Savings  Bank,  a  large 
institution  founded  in  1885,  and  in  the  following 
December  another  change  in  location  was  made 
to  the  comer  of  Fifth  and  Spring  Streets.  A 
further  acquisition  was  made  in  19 12  when  it  took 
over  the  Equitable  Savings  Bank,  the  founders 
of  which  were  W.  J.  Washburn  and  Willis  Booth. 
Shortly  afterward  the  Southern  Trust  Company 
was  acquired,  and  the  institution  from  this 
period  may  be  said  to  have  entered  upon  a 
trust  company  business  in  the  fullest  sense. 


i88       Story  of  Trust  Companies 

The  reports  of  1909  showed  resources  of 
$20,000,000  and  48,000  deposit  accounts.  On 
June  30,  1916,  the  capital  was  $1,800,000,  the 
surplus  and  undivided  profits  $2,045,000,  the 
entire  balance  sheet  showing  an  aggregate  of 
assets  of  $51,000,000,  making  it,  in  this  respect, 
the  strongest  concern  engaged  in  trust  company 
business  west  of  Chicago. 

One  of  Chicago's  leading  institutions,  the 
American  Trust  &  Savings  Bank,  organized  in 
1889,  for  a  time  having  as  its  President  G.  B. 
Shaw,  and  later  Edwin  A.  Potter,  was  taken 
over  by  the  stockholders  of  the  Continental 
National  Bank  in  August,  1909.  Under  the 
arrangement  then  effected,  all  of  the  stock  was 
acquired  by  the  stockholders  of  the  Continen- 
tal &  Commercial  National  Bank,  and  the 
title  changed  to  Continental  &  Commercial 
Trust  &  Savings  Bank.  The  institution  is 
allied  with  the  present  great  Continental  & 
Commercial  National  Bank  of  Chicago,  both 
companies  being  presided  over  by  George  M. 
Reynolds  as  President.  The  concern  is  fourth 
in  point  of  size  among  trust  companies  in  the 
Central    West.     It    occupies    quarters    in    the 


New  England's  ''Foremost"    189 

Continental  &  Commercial  Bank  Building  at 
No.  208  South  La  Salle  Street,  and  reported, 
on  June  30,  1916,  $3,000,000  capital,  $2,114,000, 
of  surplus  and  undivided  profits,  and  $50,845,000 
of  total  resources. 

We  come  now  to  the  story  of  New  England's 
foremost  trust  company  development.  This 
bears  the  name  of  the  Old  Colony  Trust  Com- 
pany of  Boston.  On  the  14th  of  June,  1890, 
it  began  a  business  destined  to  become  the 
largest  of  its  kind  in  New  England.  The  story 
of  that  first  day's  transactions  as  carried  on  in 
a  small  back  office  at  No.  50  State  Street  was 
graphically  told  in  a  sketch  published  by  the 
Company  twenty-five  years  later.  This  is 
how  it  reads: 

"Business  was  not  particularly  brisk, 
and  when  the  closing  hour  arrived  the  cus- 
tomers of  the  youngest  banking  institution 
in  Boston  numbered  two,  both  of  whom  were 
officers  of  the  company.  The  office  force 
consisted  of  three,  Messrs.  T.  Jefferson 
Coolidge,  Jr.,  Charles  S.  Tuckerman,  and 
George  E.  Stickney,  assisted  by  an  office  boy, 
name    unknown,    who   vanished   before    the 


190       Story  of  Trust  Companies 

day  ended.  Mr.  Tuckerman  was  the  first  de- 
positor, opening  an  account  for  himself  and 
another  as  trustee.  The  third  and  final  de- 
posit for  the  day  was  made  by  Mr.  Coolidge. 
Thus  it  was  sort  of  a  family  affair — that 
first  day's  business — and  it  offered  no  sug- 
gestion of  the  surprising  change  which  the 
ledgers  were  to  reveal  after  twenty-five  years : 
open  accounts,  32,625;  customers  resident 
in  forty-three  out  of  forty-eight  States,  in 
Hawaii,  Porto  Rico,  and  the  Philippines, 
and  also  in  Canada,  Mexico,  the  West  Indies, 
Central  America,  South  America,  England, 
France,  Switzerland,  Italy,  Germany,  Syria, 
China,  Japan,  and  Australia;  resources  more 
than  one  hundred  millions  of  dollars;  fifth 
largest  trust  company  in  America." 

In  1892  the  Company  removed  to  the  Ames 
Building  at  the  corner  of  Washington  and 
Court  Streets.  Until  that  time  accounts  were 
added  slowly;  in  fact,  a  year  later,  the  record 
of  customers'  accounts  was  being  kept  in  a  book 
of  two  hundred  pages  having  spaces  for  only 
2400  names.  In  1902  the  Temple  Place  branch 
was  opened,  and  in  1909  the  site  at  No.  17 
Court  Street  was  purchased,  and  the  Company's 


The  ''Old  Colony"  191 

present  home  erected  thereon,  being  first 
occupied  in  December  of  that  year. 

The  Company  grew  without  consoHdation 
until  its  deposits  were  in  excess  of  $40,000,000 
in  1 910.  In  this  latter  year  it  was  consolidated 
with  the  City  Trust  Company  and  its  deposits 
increased  to  approximately  $75,000,000.  In 
1 9 14  the  Bay  State  Trust  Company  with  about 
$6,500,000  of  deposits  was  conaoHdated  into 
the  Old  Colony  Trust  Company.  This  former 
company  had  long  been  controlled  by  stock 
ownership,  and  through  this  consolidation  the 
Old  Colony  Trust  Company  acquired  a  second 
branch  office  on  Boylston  Street. 

In  1903  Gordon  Abbott  succeeded  Mr.  Cool- 
idge  as  President  and  served  until  1910  when 
Philip  Stockton,  the  present  incumbent,  was 
chosen  at  the  time  of  the  consolidation  with 
the  City  Trust  Company.  In  1913  Mr.  Abbott 
became  Chairman  of  the  Board  and  Francis 
R.  Hart,  Vice-President,  was  made  Vice-Chair- 
man. 

The  story  of  the  growth  of  this  huge  concern, 
as  expressed  in  figures,  contrasts  strikingly  with 
the  piquant  account  of  that  "first  day,"  and  is 


192       Story  of  Trust  Companies 

of  more  than  passing  significance.  In  1896  the 
Company  had  total  resources  of  $11,772,302.74 
and  capital  of  $1,000,000.  By  1906  the  total 
resources  were  $40,019,005.63  and  the  capital 
stock  had  been  increased  to  $1,500,000,  while 
the  surplus  and  undivided  profits  were  over 
$5,500,000. 

During  the  past  ten  years,  within  which 
time  most  of  the  mergers  referred  to  were  con- 
summated, the  capital  stock  has  been  further 
increased  to  $6,000,000.  The  surplus  and 
undivided  profits  on  June  30,  1916,  were 
$6,932,062.29,  the  deposits  $126,820,621.31,  and 
the  total  resources,  as  of  the  same  date,  $140,- 
235,869.34,  making  the  Old  Colony  now  the 
sixth  largest  trust  company  in  America. 

Of  trust  institutions  in  St.  Louis  which  have 
endured  down  to  this  time,  the  Mississippi 
Valley  Trust  Company  is  one  of  the  oldest. 
It  was  incorporated  under  the  laws  of  Missouri 
in  1890  when  St.  Louis  was  a  city  of  460,000 
people;  to-day  there  are  800,000.  Then  only 
two  bridges  spanned  the  Mississippi  River 
where  now  there  are  four,  and  in  this  space 
of   twenty-six    years    the    city's    banks   have 


Mississippi  Valley  Trust  Co.     193 

doubled  in  number  while  their  wealth  has  been 
increased  sixfold.  Six  years  after  the  Company 
was  established,  its  total  resources  were  reported 
at  a  little  more  than  $4,600,000.  The  precise 
total  in  June,  1906,  was  $25,647,603.53;  in  June, 
1916,  the  figure  was  $30,002,168.57. 

Its  first  President,  Julius  S.  Walsh,  is  now 
Chairman  of  the  Board  of  Directors,  having 
been  succeeded  in  the  presidency  by  Breckin- 
ridge Jones,  the  Company's  first  Secretary. 
The  Company  is  located  at  the  northwest 
corner  of  Fourth  and  Pine  streets  where  the 
regular  appointments  incidental  to  banking 
and  trust  company  business  are  maintained,  in- 
cluding a  real  estate,  a  bond,  a  farm  loan,  and 
a  safe  deposit  department.  The  first  office 
was  in  a  single  room  on  the  third  floor  of 
the  old  Laclede  Building.  After  a  year  the 
Company  moved  to  No.  303  North  Fourth 
Street,  expecting  to  occupy  those  quarters  for 
some  time,  but  the  rapid  growth  of  the  busi- 
ness soon  necessitated  another  change  and  the 
fine  white  stone  building  it  now  occupies  was 
erected. 

The  capital  stock,  originally  $1,300,000,  has 
13 


194       Story  of  Trust  Companies 

been  increased  at  intervals  and  now  stands  at 
$3,000,000,  while  surplus  and  undivided  profits 
of  over  half  a  million  of  dollars  in  1896  are 
reported  at  $5,307,470.16  for  1916. 

The  Company  has  had  the  administration 
of  some  very  large  trust  estates.  Four  of  these, 
amounting  in  each  case  to  upwards  of  a  million 
dollars,  are  in  the  names  of  the  late  James  T. 
Drummond,  tobacconist,  Eugene  F.  WilHams, 
shoe  manufacturer,  and  Charles  Clark  and 
Auguste  B.  Ewing,  capitalists. 

Among  numerous  enterprising  features  of 
m.anagement  should  be  mentioned  a  bi-monthly 
periodical  entitled  Service  addressed  to  "those 
who  are,  and  those  who  might  be,  patrons  of 
the  Mississippi  Valley  Trust  Company."  The 
Company's  steady  growth  has  been  that  of  a 
single  institution  without  absorption  of,  or 
consolidation  with,  any  other  corporation. 


CHAPTER  XIV 

1 89 1    TO    1900.      THE   LARGEST   TRUST   COMPANY 

OF    PRESENT    TIMES    AND    SOME    LATER 

ORGANIZATIONS 

We  come  now  to  the  recounting  of  some 
achievements  by  a  single  trust  company  during 
the  past  quarter  century,  the  scope  and  volume 
of  which  have  been  upon  an  imrivaled  scale. 

This  is  the  story  of  the  Guaranty  Trust 
Company  of  New  York,  a  comparatively  young 
concern,  yet  now  the  largest  trust  company  in 
America.  The  institution,  like  some  others 
in  the  earlier  years,  sprang  from  an  older  cor- 
poration with  fiduciary  powers  of  a  very  differ- 
ent character  from  those  embraced  in  trust 
operations.  This  forerunner  was  the  New  York 
Guaranty  &  Indemnity  Company,  dating  back 
to  1864.  From  then  until  1891  a  business 
in  guarantees  was  transacted  in  line  with  the 

195 


196       Story  of  Trust  Companies 

title,  but  in  limited  proportions.  The  accom- 
panying illustration  shows  the  old  Company's 
home  in  Broad  Street  adjoining  the  former 
Stock  Exchange. 

About  1890  it  occurred  to  the  minds  of  a 
group  of  prominent  New  York  financiers  that 
there  would  be  possibilities  in  a  plan  of  broad- 
ening out  into  a  regular  trust  business,  including 
the  receiving  of  deposits.  This  was  per- 
missible under  its  charter,  the  Company  always 
having  been  under  the  supervision  of  the  State 
Banking  Department.  In  1891,  the  capital 
was  increased  from  $100,000  to  $2,000,000,  with 
a  paid-in  surplus  of  $500,000.  The  institution 
then  began  business  as  a  full-fledged  trust 
company  at  No.  59  Cedar  Street,  in  the  Mutual 
Life  Building.  This  was  under  the  presidency 
of  Edwin  Packard,  who  was  succeeded  by  Walter 
G.  Oakman  in  1894.  Tw^o  years  later  the  title 
was  shortened  to  read  Guaranty  Trust  Company 
of  New  York.  John  W.  Castles  succeeded  Mr. 
Oakman  in  1900,  and  Alexander  J.  Hemphill  be- 
came President  in  1908.  The  last  named  is  now 
Chairman  of  the  Board,  Charles  H.  Sabin  hav- 
ing succeeded  to  the  presidency  in  191 3. 


Modern  Organization  197 

The  directorate  of  the  Company  from  the 
first  has  been  made  up  of  names  synonymous 
with  great  things  in  the  financial  world.  Dur- 
ing the  early  years  the  Board  comprised,  among 
others,  George  F.  Baker,  August  Belmont, 
Edward  H.  Harriman,  Levi  P.  Morton,  Alex- 
ander E.  Orr,  and  Frederick  W.  Vanderbilt. 
In  1 910,  the  Morton  Trust  Company  and  the 
Fifth  Avenue  Trust  Company,  each  of  them 
old-established  institutions,  were  merged  with 
the  Guaranty,  and  in  1912  the  Standard  Trust 
Company,  another  representative  institution, 
was  absorbed. 

The  growth  of  the  Company  soon  necessi- 
tated increased  office  space  on  the  first  floor  of 
the  Mutual  Life  Building,  but  these  quarters 
were  shortly  outgrown  and  in  1913  a  new  build- 
ing was  erected  and  occupied  at  No.  140  Broad- 
way, comer  of  Liberty  Street.  It  is  one  of  the 
most  impressive  bank  buildings  in  the  world, 
containing  every  known  appliance  to  faciHtate 
work  and  to  insure  the  comfort  of  customers 
and  employees.  In  its  modern  vaults  repose 
some  billions  of  dollars'  worth  of  holdings  in 
trust.     Pneumatic  tubes  give  instant  communi- 


198       Stoiy  of  Trust  Companies 

cation  between  different  parts  of  the  building, 
which  contains  over  eight  hundred  employees. 
On  the  upper  floors  there  are  conference  rooms 
for  the  use  of  visitors  and  customers,  and 
these  afford  transient  headquarters  for  out-of- 
town  guests.  There  is  also  maintained  one  of 
the  most  comprehensive  business  and  financial 
libraries  in  the  country. 

The  spirit  of  co-operation  and  companion- 
ship is  highly  developed  among  Guaranty  Trust 
Company  officers  and  employees,  whether  at 
work  or  at  play.  There  are  efficiency  prizes, 
a  debating  society,  and  bowling  and  baseball 
teams  belonging  to  the  trust  company  leagues. 
Outings  occur  each  summer  and  in  winter  the 
Guaranty  Club  holds  banquets.  There  is  a 
liberal  pension  system  administered  by  an 
official  board  of  managers  appointed  by  the 
Board  of  Directors. 

The  Guaranty  Company's  uptown  office 
has  been  at  Fifth  Avenue  and  Forty-third 
Street  in  offices  formerly  occupied  by  the 
Fifth  Avenue  Trust  Company.  In  the  fall  of 
1 91 6  it  moved  into  new  quarters  directly  across 
the  street  on  the  southeast  corner,  occupying 


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A  Significant  Comparison       199 

four  floors  of  an  impressive  new  building.  An- 
other up-town  office  is  being  built  at  Madison 
Avenue  and  Sixtieth  Street.  There  is  an  office 
in  London  and  there  are  resident  representatives 
in  Paris  and  Buenos  Aires. 

The  capital  was  increased  to  $5,000,000  in 
1910,  again  to  $10,000,000  in  1912,  and  on 
November  8,  1915,  was  brought  up  to  a  total 
of  $20,000,000.  There  is  upwards  of  $20,000,000. 
of  surplus  and  undivided  profits  at  the  present 
time,  and  with  over  half  a  billion  of  total 
resources,  deposits  in  the  neighborhood  of 
$400,000,000,  and  a  foreign  department  trans- 
acting an  annual  business  of  approximately 
six  billions  and  a  half  of  dollars,  the  institution 
stands  to-day  first  among  trust  companies  and 
is  exceeded  in  size  by  only  one  bank,  the  Na- 
tional City.  The  growth  of  the  Company  in 
aggregate  resources,  during  the  past  twenty- 
five  years,  is  graphically  shown  on  the  oppo- 
site page. 

Some  appreciation  of  what  the  Guaranty 
Trust  Company's  present  $520,000,000  of  total 
resources  and  liabilities  signify  is  to  be  had 
when  a  country- wide  glance  is  taken  backwards 


2C0       Story  of  Trust  Companies 

to  a  point  twenty  years  ago.  The  Bankers 
Encyclopedia  of  1896  contained  a  reasonably 
complete  showing  of  trust  compan}^  figures 
even  though  these  were  unofficial.  A  tabulation 
shows  that  there  were  then  forty-one  companies 
in  New  York  State  having  liabilities  of  387 
millions  of  dollars.  The  aggregate  for  Pennsyl- 
vania's eighty- two  companies  was  183  millions. 
These  123  companies  in  the  two  leading  States, 
as  regards  trust  company  development, 
amounted  at  that  time  to  but  50  millions  of  dol- 
lars more  than  the  total  now  shown  by  this  one 
New  York  company.  The  tabulated  totals 
for  509  American  companies  showed  capital 
152  millions,  surplus  and  undivided  profits 
96  millions,  deposits  709  millions,  grand  total 
957  millions,  a  sum  equal  to  just  184  per  cent. 
of  the  Guaranty's  520  millions,  as  shown  in 
1916. 

The  assertion  has  been  recently  and  authori- 
tatively made  that  the  "turnover"  of  this 
great  institution, — its  aggregate  of  funds  annu- 
ally handled,  including  securities  and  foreign 
exchange — is  greater  than  that  of  any  other 
banking  corporation  in  the  world. 


Panic  of  1893  201 

A  few  words  should  here  be  said  regarding 
the  financial  crisis  of  1893.  Early  in  that  year 
a  country-wide  business  disturbance  occurred. 
There  was  a  series  of  distressing  railroad  fail- 
ures, including  the  Erie,  Reading,  Northern 
Pacific,  Union  Pacific,  and  Atchison.  In  New 
York  the  deposits  of  the  Clearing  House  banks 
fell  from  431  millions  of  dollars  to  370  millions 
in  less  than  three  months.  During  August  a 
premium  was  demanded  everywhere  upon  all 
kinds  of  currency.  The  business  collapses  of 
the  year  numbered  over  fifteen  thousand. 
Among  these  were  598  financial  institutions 
made  up  of  National,  State,  and  savings  banks, 
private  bankers  and  loan  and  trust  companies. 
But  a  remarkable  thing  to  be  noted  regarding 
the  banking  troubles  of  1893  was  the  stability 
of  the  loan  and  trust  companies.  For  if  any 
proof  were  needed  that  by  now  these  trust 
institutions  had  established  themselves  on  a 
firm  foundation,  and  had  come  to  stay,  it  is  to 
be  seen  in  the  insignificance  of  the  number  of 
suspensions,  which  out  of  598  banking  failures 
of  all  kinds  amounted  to  only  14.  It  is  a 
fact,   too,   that  almost  without  exception   the 


202       Story  of  Trust  Companies 

companies  to  close  were  small  concerns,  as  a 
rule  located  in  unimportant  fields. 

The  United  States  Mortgage  Company, 
established  in  1871,  first  undertook  a  trust  and 
deposit  business  in  January,  1893.  Among  the 
names  of  the  incorporators  are  found  those  of 
J.  Pierpont  Morgan,  Abiel  A.  Low,  Charles 
G.  Landon,  David  Dows,  and  other  men  who 
were  large  factors  in  the  financial  and  business 
life  of  the  city,  state,  and  nation.  In  common 
with  the  Guaranty  Trust  Company,  its  expan- 
sion was  promoted  by  Mutual  Life  interests. 
After  two  years  of  operations  under  the  old 
title  its  name  was  altered  in  1895  to  United 
States  Mortgage  &  Trust  Company.  The 
"Mortgage  Company,"  as  it  has  been  familiarly 
known,  has  continued  to  carry  a  large  line  of 
conservative  real-estate  loans,  placed  mostly 
in  the  larger  cities  of  the  West  and  South. 
Charles  R.  Henderson  was  the  first  Presi- 
dent, and  the  order  of  succession  has  been: 
George  W.  Young,  1894;  George  M.  Gum- 
ming, 1905;  Arthur  TurnbuU,  1908;  Cornelius 
C.  Cuyler,  1909;  and  John  W.  Platten,  since 
1910. 


The  ''Mortgage"  Company     203 

The  capital  prior  to  1893  was  $1,000,000. 
Since  that  time  it  has  been  $2,000,000. 

In  1903,  the  writer  of  the  present  volume, 
who  was  at  that  time  Treasurer  of  the  Company, 
recommended  to  its  Board  a  plan  of  annually 
publishing  a  book  of  trust  company  statements. 
These  figures,  with  other  data  and  the  names 
of  the  officers  and  directors  of  all  American 
companies,  first  appeared  as  of  June  30th 
that  year.  The  idea  has  been  availed  of  every 
summer  since  under  the  title,  "Trust  Com- 
panies of  the  United  States."  Each  issue  has 
been  presented  to  the  financial  public  as  com- 
plimentary on  the  part  of  the  "Mortgage 
Company."  The  collected  volumes  form  a  sub- 
stantial compendium  of  facts  and  statistics, 
covering  thirteen  years  past,  the  usefulness 
of  which  in  preparing  this  work  is  gratefully 
acknowledged. 

The  present  strength  of  the  Company  has 
been  gained  through  a  gradual  and  steady 
accretion  of  business  without  mergers  or  con- 
solidations of  any  kind;  while  thoroughness, 
dependability,  and  trustworthiness  have  char- 
acterized the  administration  of  its  affairs. 


204       Story  of  Trust  Companies 

Twenty  years  ago  the  Company's  total 
resources  were  $13,000,000;  ten  years  ago  they 
were  $49,000,000;  in  19 16,  they  reached  the 
one  hundred  million  mark,  making  it  one  of 
the  eleven  trust  companies  in  the  country 
having  total  resources  of  this  amount,  or 
upwards. 

The  United  States  Mortgage  &  Trust 
Company's  main  offices  have  always  been  in 
Cedar  Street,  in  the  Mutual  Life  Building. 
There  are  two  uptown  branches. 

There  are  a  number  of  important  trust  com- 
panies on  the  Pacific  Coast  to-day,  and  of  the 
very  large  ones  the  Union  Trust  Company  of 
San  Francisco  is  the  oldest.  It  was  established 
in  1893  under  Isaias  W.  Hellman,  as  President, 
who  continued  in  that  office  until  191 6,  when 
he  became  Chairman  of  the  Board  and  was 
succeeded,  as  President,  by  his  son,  I.  W.  Hell- 
man,  Jr.  Three  years  after  this  organization 
was  effected,  the  Company  had  $750,000  capi- 
tal, $100,000  of  surplus,  and  a  shade  less  than 
$3,000,000  of  total  resources.  The  capital  to- 
day is  $1,200,000;  the  surplus  is  $1,847,000;  the 
total  resources  are,  approximately,  $30,000,000. 


Cleveland  Trust  Company      205 

The  offices  in  the  early  years  were  at  the 
junction  of  Post,  Montgomery,  and  Market 
Streets.  Since  191 1  the  Company  has  been  at 
the  intersection  of  Market  and  O'Farrell 
Streets  and  Grant  Avenue. 

The  par  of  shares  of  stock  is  $1000  each,  and 
these  are  now  quoted  at  $2350  per  share. 

The  Cleveland  Trust  Company  was  organized 
in  1894  ^^^  began  its  career  in  a  small  room  on 
the  ninth  floor  of  the  Garfield  Building  with  a 
capital  of  $500,000  and  a  paid-in  surplus  of 
$100,000  and  no  deposits.  In  the  face  of  all 
kinds  of  impediments  it  went  to  work  and  after 
the  lapse  of  half  a  year  the  secretary  reported 
deposits  of  $62,000  and  a  trust  business  that 
consisted  of  the  certifying  of  an  issue  of  bonds. 

On  September  10,  1895,  the  Company  moved 
into  the  basement  of  the  Garfield  Building 
where  it  had  purchased  the  vaults  of  the  re- 
cently organized  Security  Safe  Deposit  & 
Trust  Company,  the  latter  going  out  of  busi- 
ness and  the  Cleveland  Trust  Company  taking 
its  place  and  equipment.  From  this  point 
the  progress  of  the  institution  has  been  un- 
checked.     Before  the  close  of  1896  the  deposits 


2o6       Story  of  Trust  Companies 

passed  the  million-dollar  mark.  Inside  of  two 
years  additional  space  was  required  and  a 
ground-floor  office  was  rented. 

On  January  6,  1903  a  consolidation  was 
effected  with  the  Western  Reserve  Company, 
which  brought  the  capital  of  the  Cleveland 
Trust  Company  up  to  $1,750,000  and  the  sur- 
plus to  $1,050,000.  J.  G.  W.  Cowles  was 
President  until  1903.  Calvary  Morris  succeeded 
Mr.  Cowles  and  retained  the  presidency  until 
1908.  He  was  followed  by  Frederick  H.  Goff, 
who  is  President  at  this  time. 

The  Cleveland  Trust  Company  has  absorbed 
a  number  of  other  trust  companies  and  banks 
in  and  near  Cleveland  during  the  past  twenty- 
one  years,  many  of  these  institutions  having 
formed  the  basis  of  the  present  system  of 
Cleveland  Trust  Company  branches. 

The  branch  bank  idea  is  only  one  of  the  num- 
ber of  innovations  for  which  the  Cleveland 
Trust  Company  is  noted.  It  was  the  first 
bank  to  adopt  advertising  as  a  direct  influence 
for  the  increase  of  its  business.  It  was  the 
first  bank  to  advertise  nationally  for  savings 
deposits   by   mail.     It   was   the   first   bank   in 


Distinctive  Policies  207 

Cleveland  to  have  a  separate  department  for 
women,  and  it  was  also  the  pioneer  in  the 
establishment  of  a  number  of  distinctive  policies 
for  the  greater  safeguard  of  its  depositors'  and, 
in  general,  of  its  patrons'  interests. 

Four  fundamental  principles,  widely  an- 
nounced as  characterizing  the  Cleveland  Trust 
Company,  are: 

1.  No  loans  to  directors  or  officers; 

2.  Joint  control  of  securities  and  cash; 

3.  Continuous  daily  audit;  and 

4.  Directors  who  direct, 

all  of  these  policies  having  been  fully  consum- 
mated during  Mr,  Goff's  presidency. 

Starting  with  four  employees  in  an  up-stairs 
room,  smaller  than  any  of  its  present  branches, 
the  Cleveland  Trust  Company  now  has  nearly 
four  hundred  employees,  a  monumental  office 
building  at  the  corner  of  Euclid  Avenue  and 
East  Ninth  Street,  a  five-story  annex  to  the 
main  building,  and  fifteen  branches  m  addition 
to  the  main  building.  It  serves  a  geographical 
territory  of  about  sixty  miles  in  length  and 
twenty  miles  wide.  It  has  over  122,000  ac- 
counts; the  present  capital  and  surplus  is  more 


2o8       Story  of  Trust  Companies 

than  $5,200,000,  and  its  total  resources  on  June 
30,  1916,  were  $49,071,447.24. 

In  addition  to  its  phenomenal  growth  and 
its  unimpeachable  stability  as  a  savings  bank, 
it  has  made  great  progress  in  its  trust  and 
estates  departments.  It  has  perfected  a  num- 
ber of  unusual  types  of  trust  agreements  among 
which  may  be  mentioned  the  "Living  Trust" 
agreement.  It  is  also  trustee  for  the  funds  and 
estates  brought  together  under  the  denomina- 
tion of  the  Cleveland  Foundation,  which  is  a 
community  trust,  comprising  a  union  of  gifts 
from  different  estates  or  parts  of  estates  contri- 
buted by  the  people  of  Cleveland  and  managed 
for  them  for  the  benefit  of  the  community. 
This  plan,  originated  by  Mr.  Goff,  is  now  nearly 
two  years  old  and  has  been  copied  in  no  less 
than  thirteen  other  American  cities. 

Mention  is  next  to  be  made  of  a  great  south- 
ern institution,  organized  as  a  trust  company 
in  New  Orleans  in  1895.  This  was  the  year 
in  which  the  Canal  Bank  &  Trust  Company 
acquired  the  assets  of  the  old  Canal  Bank. 
Nine  years  later  the  Louisiana  National  Bank 
was  also  absorbed. 


Canal  Bank  &  Trust  Company  209 

The  story  of  the  Can?l  Bank  dates  back  to 
1 83 1,  when,  as  the  first  of  a  series  of  what  were 
then  known  as  improvement  banks,  it  secured 
a  charter  for  the  purpose  of  financing  the  con- 
struction of  a  navigation  canal  connecting  the 
then  American  port  of  the  City  of  New  Orleans, 
Faubourg  St.  Mary,  with  Lake  Pontchartrain. 
Under  this  charter  extensive  banking  privileges 
were  allowed,  and  during  the  vicissitudes  of 
over  eighty-five  years,  the  Bank  has  always 
served  the  communit}^  remaining  open  during 
the  three  wars  and  numerous  panics  that  have 
intervened,  and  is  to-day  occupying  its  own 
ten-story  building  located  within  a  hundred- 
yard  radius  of  the  sites  of  the  four  banking 
houses  which  it  has  erected  and  outgrown  during 
the  three  generations  of  its  existence. 

Accordingly  this  modern  trust  company 
makes  the  proud  claim  of  being  the  oldest  insti- 
tution amongst  more  than  ten  thousand  bank- 
ing corporations  in  the  Mississippi  Valley. 
In  1904  R.  M.  Walmsley,  who  had  been  Presi- 
dent of  the  Louisiana  National  Bank,  assumed 
the  same  title  in  the  trust  company.  The  com- 
bined assets  of  the  two  institutions  were  then 
14 


210      Story  of  Trust  Companies 

a  matter  of  about  $11,000,000.  In  1916,  with 
capital  of  $2,000,000  and  surplus  and  undivided 
profits  of  $636,000,  the  total  resources  and 
liabilities  have  grown  to  an  aggregate  of 
$19,400,000.  W.  R.  Irby  acts  as  President 
at  this  time,  and  W.  P.  Burke  is  Chairman 
of  the  Board  of  Directors.  The  Company's 
building  is  attractively  located  at  Camp  and 
Gravier  Streets. 

One  St.  Louis  trust  company,  the  Mercan- 
tile, had  its  beginning  in  a  real-estate  office  on 
the  first  floor  of  the  Columbia  Building  in  that 
city.  This  was  in  1899  and  one  clerk  acted  as 
Paying,  Receiving,  Discount,  and  Note  Teller, 
answering  the  telephone  and  helping  with  the 
correspondence.  On  that  day,  seventeen  years 
ago,  Festus  J.  Wade,  then  and  now  the  Presi- 
dent, witnessed  deposits  with  the  Company 
of  about  $17,000.  In  the  meantime  he  has 
seen  the  Company  expand  to  an  institution 
with  over  $40,000,000  total  resources.  The 
Mercantile  now  has  a  capital  of  $3,000,000 
and  $6,800,000  of  surplus  and  undivided  profits. 
The  Company  has  eleven  departments  including 
a     department     with     safe-deposit     vault    ca- 


The  Mercantile  of  St.  Louis     211 

pacity  of  seventeen  thousand  boxes.  The  Cor- 
poration Department,  although  comparatively 
recently  organized,  has  charge  of  over  fifty 
corporations,  many  representing  very  large 
St.  Louis  interests  in  the  field  of  incorporated 
estates,  realty  and  similar  operations,  and 
which  leave  to  the  Trust  Company  the  entire 
management  of  their  affairs. 

The  Real  Estate  Department,  instituted  some 
years  ago,  when  the  Anderson  Wade  Realty 
Company  was  absorbed,  is  responsible  as  agent 
for  the  erection  and  financing  of  many  promi- 
nent buildings  in  St.  Louis,  including  the  Jeffer- 
son Hotel,  the  Planters'  Hotel,  the  Hargardine 
McKittrick,  the  Grand  Leader,  Union  Electric 
Light  Buildings,  Jefferson  Theatre,  and  other 
business  structures.  The  Mercantile  also  has 
a  Foreign  Exchange  Department  which  had  its 
inception  at  the  time  of  the  World's  Fair  at 
St.  Louis,  and  it  issues  its  own  travelers* 
checks. 

In  1904  the  Mercantile  Trust  Company 
acquired  the  goodwill  and  assets  of  the  Ameri- 
can Central  Trust  Company.  In  the  same  year 
an  alarming  run   occurred   in   St.   Louis   and, 


212       Story  of  Trust  Companies 

with  disconcerted  customers  clamoring  at  the 
doors,  a  quick  remedy  had  to  be  provided. 
The  directors  met  and  created  a  joint  pledge 
of  their  personal  fortunes,  estimated  as  worth 
about  fifty  millions  of  dollars.  Very  naturally 
the  run  subsided  as  quickly  as  it  had  begun. 

The  Mercantile  Trust  Company  is  a  member 
of  the  Federal  Reserve  Bank  and  is  the  only 
trust  company  in  the  eighth  federal  reserve 
district  having  membership  in  this  system. 
The  Mercantile  was  the  first  trust  company 
in  St.  Louis  to  join  the  St.  Louis  Clearing  House 
Association,  and  was  for  a  number  of  years  the 
only  trust  company  member.  The  institution 
is  under  the  supervision  of  four  governing  bodies, 
the  only  institution  in  St.  Louis  so  supervised. 
These  are  the  Federal  Reserve  Bank,  the  State 
Bank  Department  of  Missouri,  the  State  Bank 
Department  of  Illinois,  and  the  St.  Louis 
Clearing  House. 

The  Company  has  had  many  large  trusts,  a 
comparatively  recent  one  being  that  under  the 
will  of  James  Campbell  of  St.  Louis,  This 
estate  of  nearly  twenty  millions  of  dollars  is 
being  administered  by  the  Company  for  the 


Commercial  of  New  Jersey      213 

benefit  of  the  wife  and  daughter  during  their 
lifetime,  after  which  the  entire  trust  estate 
goes  to  the  St.  Louis  University. 

The  Mercantile  National  Bank  is  affiliated 
with  the  Mercantile  Trust  Company,  both 
being  under  the  same  management.  The  capi- 
tal of  the  Mercantile  National  Bank  is  $1,500,- 
000,  the  surplus  and  undivided  profits  over 
half  a  million  dollars,  and  total  resources  over 
nine  million  dollars. 

The  Mercantile  Trust  Company  has  occupied 
the  very  attractive  building  at  Eighth  and 
Locust  Streets,  adjoining  the  Mercantile  Na- 
tional Bank  building,  for  a  period  of  over 
fourteen  years.  An  addition  will  shortly  be 
built,  and  will  occupy  the  half  block  north  of 
the  present  building. 

A  final  word  is  to  be  said  regarding  nine- 
teenth century  incorporations,  on  behalf  of  the 
Commercial  Trust  Company  of  New  Jersey,  es- 
tablished in  1900.  It  is  located  at  No.  15  Ex- 
change Place,  Jersey  City  and  has  been  under 
the  management  of  John  W.  Hardenbergh  since 
its  beginning.  Having  absorbed  the  Third 
National   Bank  of  Jersey   City  in    1915,   this 


214       Story  of  Trust  Companies 

institution  has  a  number  of  prominent  New 
York  names  represented  on  its  directorate,  and 
the  trustworthy  nature  of  its  operations  is  wxll 
illustrated  by  the  following  figures  showing 
growth : 


Capital 
Surplus 
Total  Resources 


igoj 


$1,000,000.00 

1,851,256.27 

11,025,312.84 


1Q06 


$1,000,000.00 

2,197,460.27 

12,523,886.78 


igi6 


$1,000,000.00 

2,517.249-54 
25,082,369.83 


CHAPTER  XV 

NEW    COMPANIES   IN    THE  TWENTIETH   CENTURY 

The  early  years  of  the  twentieth  century  were 
marked  by  ever  increasing  numbers  of  new 
organizations  in  the  trust  company  field.  For 
example,  during  1903  there  were  373  new  com- 
panies established  throughout  the  country. 
Of  these  nearly  one  hundred  were  in  Pennsyl- 
vania; more  than  twenty  were  in  Pittsburgh; 
New  York  City  had  an  increase  of  fifteen, 
not  including  six  in  Brooklyn;  the  single  State 
of  Texas  reported  eighteen  new  companies. 

During  the  next  few  years,  until  1907,  there 
was  continued  activity  in  forming  new  com- 
panies. In  a  chart  prepared  by  Clay  Herrick, 
of  Cleveland,  being  one  of  his  many  excellent 
contributions  to  the  literature  of  the  companies, 
it  has  been  shown  that  during  that  year  no  less 

than  150  new  companies  came  into  being. 

215 


2i6       Story  of  Trust  Companies 

In  March,  1904,  a  distinct  departure  was 
announced  in  the  field  of  trust  company  litera- 
ture. In  that  month  appeared  the  first  number 
of  a  monthly  magazine  of  which  the  New  York 
Press  remarked  under  date  of  March  15th: 

"  Trust  Companies  is  a  new  monthly  publi- 
cation which  enters  a  hitherto  unoccupied 
territory  in  the  field  of  journalistic  enterprise. 
There  are  half  a  hundred  periodicals  devoted 
to  news  of  the  banks,  but  by  some  accident 
the  news  of  the  trust  companies  has  been 
neglected.  .  .  .  Trust  Companies  should  en- 
joy great  success.  In  fact,  the  first  number 
shows  that  its  success  has  begun." 

The  editor  and  publisher  of  this  enterprising 
periodical  was  Christian  A.  Luhnow,  who  had 
been  previously  associated  with  the  editorial 
force  of  the  New  York  Commercial.  His 
magazine  was  well  received  from  the  first,  and 
continues  to-day  to  be  an  authority  both  as  to 
news  and  the  best  thought  regarding  institu- 
tional practice  and  progress. 

Returning  now  to  the  individual  narratives 
of  companies  formed  since  1900,  a  new  develop- 
ment of  1902  is  to  be  recorded.     The  Equitable 


Equitable  Trust  Company       217 

Trust  Company  of  New  York  had  been  estab- 
lished in  1 87 1  by  a  special  act  of  the  Legislature, 
under  the  name  of  the  Traders'  Deposit 
Company.  This  was  changed  in  1895  to  the 
American  Deposit  &  Loan  Company.  The 
principal  business  of  the  Company  from  that 
time  until  1902  was  that  of  making  loans  on  Hfe- 
insurance  policies.  The  Company's  affairs  were 
managed  largely  by  interests  identified  with 
the  Equitable  Life  Assurance  Society,  the 
owner  of  a  controlHng  stock  interest.  In  1902 
the  name  was  changed  to  the  Equitable  Trust 
Company  of  New  York,  and  its  field  of  activity 
was  extended  to  include  all  banking  and  trust 
functions.  The  BowHng  Green  Trust  Com- 
pany was  absorbed  in  1909  and  the  Trust 
Company  of  America  in  191 2,  the  latter  having 
itself  previously  taken  over  the  Colonial  Trust 
Company,  the  North  American  Trust  Company, 
and  the  City  Trust  Company. 

As  a  result  of  the  insurance  investigations 
in  1905,  and  the  legislation  which  soon  followed, 
it  became  necessary  for  the  Equitable  Life 
Assurance  Society  to  dispose  of  its  stock  invest- 
ments.    At    that    time    President    Alvin    W. 


2i8       Story  of  Trust  Companies 

Krech  bought  the  entire  Equitable  Life  holdings 
and  distributed  them  to  a  number  of  influential 
interests.  By  this  distribution  the  Equitable 
Trust  Company  of  New  York  was  made  an 
entirely  independent  company — that  is  to  say, 
not  controlled  by  any  single  interest,  or  number 
of  interests,  to  be  identified  or  classed  as 
particular  financial  groups. 

Under  President  Krech,  the  Equitable  has 
grown  to  remarkable  proportions.  Its  capital 
is  $3,000,000;  its  present  surplus  and  undivided 
profits  are  over  $10,000,000.  The  Company's 
balance  sheet  of  ten  years  ago  footed  about 
$55,000,000,  as  compared  with  an  aggregate 
of  over  $170,000,000  on  June  30,  191 6,  thus 
making  the  Company  fifth  in  size  in  New  York 
City  as  well  as  the  United  States.  The  increase 
of  the  business  of  the  Trust  Department  has 
kept  pace  with  the  deposits,  and  the  Company 
now  holds  securities  for  account  of  others,  or 
under  its  trusts,  aggregating  more  than 
$1,250,000,000  of  face  value.  Its  Foreign 
Exchange  Department  has  grown  with  remark- 
able rapidity  and  ranks  third  in  the  city  for 
annual  turnover  during  191 5. 


Empire  Trust  Company        219 

Prior  to  1 912  the  offices  of  the  Company  were 
at  No.  15  Nassau  Street,  from  which  location 
it  was  driven  by  the  Equitable  Building  fire  in 
January  of  that  year.  The  Company's  business 
was  not  even  halted  by  this  serious  conflagra- 
tion. Through  the  good  offices  of  its  depository 
banks,  the  tellers  of  the  Equitable  Trust  met 
that  day's  checks  on  schedule  time  and  the 
Company  was  established  and  doing  business 
in  temporary  quarters  at  No.  115  Broadway 
before  noon.  It  now  occupies  its  own  building 
at  No.  37  Wall  Street  and  the  banking  floor  in 
the  connecting  building  at  No.  43  Exchange 
Place.  Its  New  York  branches  are  located  at 
No.  618  Fifth  Avenue  and  No.  222  Broadway, 
the  latter  having  been  the  home  of  the  former 
Colonial  Trust  Company.  Branches  are  also 
maintained  in  London  and  Paris. 

The  Empire  State  Trust  Company,  later 
known  as  the  Empire  Trust  Company,  was 
established  in  1902.  The  first  office  of  the 
Company  was  at  No.  88  Wall  Street.  After 
1904  its  location  was  changed  to  No.  42  Broad- 
way where  it  continued  until  1915  when  the 
Company  occupied  a  beautiful  suite  of  offices 


220       Story  of  Trust  Companies 

in  the  new  Equitable  Building,  No.  120  Broad- 
way. 

In  1 913  two  smaller  trust  companies  were 
acquired,  namely  the  Windsor  and  Guardian. 

The  President  is  LeRoy  W.  Baldwin  under 
whose  management  the  Company  has  grown 
from  seven  millions  of  dollars  of  total  resources 
in  1906  to  an  aggregate  in  1916  of  $44,160,94742. 
The  original  capital  was  $500,000,  subsequently 
increased  to  $1,500,000. 

The  Central  Trust  Company  of  Illinois  is  a 
splendid  illustration  of  modern  banking  growth 
in  the  great  city  of  Chicago.  Formed  in  1902 
with  four  millions  of  dollars  of  capital  and  one 
million  of  surplus,  it  reported  one  year  later 
$200,000  of  undivided  profits  and  nearly 
$6,500,000  of  deposits.  By  191 6  the  capital 
was  $4,500,000,  the  surplus  and  undivided 
profits  $1,750,000,  and  the  total  of  these  and 
other  liabilities  $56,558,000. 

The  President  of  the  Company  from  the 
beginning  has  been  Charles  G.  Dawes,  formerly 
Comptroller  of  the  Currency  at  Washington. 

The  offices  since  1910  have  been  at  No.  125 
West  Monroe  Street.     One  j^ear  after  this  date 


"First  Trust  and  Savings"     221 


the  Company  absorbed  the  Metropolitan  Trust 
&  Savings  Bank.  This  was  an  institution  in 
the  five-milhon-doUar  class  at  the  time  of  its 
acquirement. 

An  important  company  was  established  in 
Chicago  in  December,  1903,  under  the  title  of 
the  First  Trust  &  Savings  Bank,  the  stock  being 
owned  by  the  stockholders  of  the  First  National 
Bank  of  Chicago.  James  B.  Forgan  acted  as 
President  of  both  institutions  until  191 5,  when 
Emile  K.  Boisot  assumed  that  title,  upon  Mr. 
Forgan's  election  as  Chairman  of  the  Board. 

The  First  Trust  &  Savings  Bank  began 
business  originally  at  No.  11 1  West  Monroe 
Street,  on  the  first  floor  of  the  First  National 
Bank  building,  and  now  occupies  the  entire 
ground  floor  of  that  building.  The  original  capi- 
tal was  $1 ,000,000  which  has  since  been  increased 
to  $5,000,000.  The  present  surplus  and  undi- 
vided profits  amount  to  $5,400,000. 

The  great  growth  of  the  institution,  since  its 
first  statement  appeared  in  1904,  is  to  be  seen 
by  a  comparison  of  the  figures  in  that  year  with 
those  of  1906  and  19 16.  As  of  June  30th,  in 
each  of  the  three  years  the  total  figures  were 


222      Story  of  Trust  Companies 

$11,186,982.73,  $30,854,781.21  and  $84,730.- 
256.98  respectively.  This  growth  has  occurred 
without  the  absorption  of  any  other  institution. 
The  Bankers  Trust  Company  opened  its 
doors  for  business  on  March  31,  1903,  at  No. 
143  Liberty  Street,  New  York.  Press  notices 
of  that  date  stated: 

* 

"Since  the  news  was  first  given  out  after 
the  formation  of  this  new  financial  institu- 
tion, its  plans  have  developed  rapidly,  and 
its  success,  judging  from  comments  in  banking 
circles,  is  already  beyond  dispute." 

The  reporter  who  wrote  those  lines  was  a  good 
prophet;  the  Company's  history  has  justified 
the  prophecy.  Beginning  with  a  capital  of 
$1,000,000,  which  was  twenty  times  over- 
subscribed, and  a  surplus  of  over  $500,000, 
the  Company  has  had  a  vigorous  and  consistent 
growth,  and  on  June  30,  19 16,  thirteen  years 
after  its  organization,  its  statement  showed 
capital  $10,000,000,  surplus  and  undivided 
profits  $15,498,791.32,  and  total  resources 
$292,078,527.26. 

The  Company  grew  out  of  the  idea  held  by 


The  ''Bankers"  223 

a  number  of  prominent  bankers  who  were 
accustomed  to  dealing  with  one  another,  that 
there  was  room  for  a  trust  company  which 
could  take  care  of  business  which  came  within 
the  knowledge  of  those  bankers  in  the  regular 
course  of  business,  but  which  they  could  not 
accept  at  their  own  institutions  because  of  the 
limitations  of  their  charters.  That  the  insti- 
tution would  be  substantial  from  the  outset 
was  to  be  seen  from  the  Hst  of  original  direc- 
tors whose  names  and  corporate  connections  are 
here  appended: 

Stephen  Baker,  President,  Bank  of  the  Man- 
hattan Co.,  N.  Y. ;  Samuel  G.  Bayne,  President, 
Seaboard  National  Bank,  N.  Y. ;  James  G. 
Cannon,  Vice-President,  Fourth  National  Bank, 
N.  Y. ;  Edmund  C.  Converse,  President,  Liberty 
National  Bank,  N.  Y.;  Henry  P.  Davison, 
Vice-President,  First  National  Bank  of  New 
York;  James  H.  Eckels,  President,  Commercial 
National  Bank,  Chicago;  Granville  W.  Garth, 
President,  Mechanics'  National  Bank,  N.  Y. ; 
A.  Barton  Hepburn,  Vice-President,  Chase 
National  Bank,  N.  Y. ;  William  Logan,  Cashier, 
Hanover    National    Bank,    N.    Y. ;    Edgar    L. 


224      Story  of  Trust  Companies 

Marston,  Blair  &  Co.,  Bankers,  N.  Y. ;  Gates  W. 
McGarrah,  President,  Leather  Manufacturers 
National  Bank,  N.  Y.;  William  H.  Porter, 
Vice-President,  Chemical  National  Bank, 
N.  Y.;  George  W.  Perkins,  J.  P.  Morgan  &  Co., 
Bankers,  N.  Y. ;  Daniel  G.  Reid,  Vice-President, 
Liberty  National  Bank,  N.  Y. ;  Edward  F. 
Swinney,  President,  First  National  Bank,  Kan- 
sas City;  Francis  H.  Skelding,  Cashier,  First 
National  Bank,  Pittsburgh;  John  F.  Thompson, 
Vice-President,  Bankers  Trust  Co.;  Albert  H. 
Wiggin,  Vice-President,  National  Park  Bank, 
N.  Y. ;  Samuel  Woolverton,  President,  Gallatin 
National  Bank,  N.  Y. ;  Robert  Winsor,  Kidder, 
Peabody  &  Co.,  Boston;  and  Edward  F.  C. 
Young,  President,  First  National  Bank,  Jersey 
City,  N.  J. 

The  rise  in  total  resources  between  the  dates 
June  30,  1903,  and  September  7,  1905,  was,  in 
the  order  of  progression: 


June  30,  1903 $  5,748,174.87 

December  31,  1903 10,085,557.31 

June  30,  1904 15,304,064.48 

December  31,  1904 18,497,504.50 

June  7,  1905 24,899,785.18 

September  7,  1905 25,436,229.50 


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A  Rapid  Growth  225 

The  rapidity  of  this  growth  may  be  attributed 
in  large  part  to  the  influence  of  the  unusually 
strong  directorate;  its  members  have  been  able 
to  send  the  Company  a  great  deal  of  business 
in  the  way  of  by-products  of  their  own  institu- 
tions, and  undertakings;  at  the  same  time  their 
presence  on  the  board  has  inspired  public  con- 
fidence to  such  an  extent  as  to  attract  a  very 
large  volume  of  other  business. 

E.  C.  Converse  was  President  until  1913; 
he  was  succeeded  by  Benj.  Strong,  Jr.,  who 
held  the  office  until  he  became  Governor  of  the 
Federal  Reserve  Bank  of  New  York.  Since 
1915,  the  Company's  executive  policy  has  been 
under  the  direction  of  Mr.  Seward  Prosser. 

Outgrowing  the  small  quarters  in  Liberty 
Street,  the  new  Company  moved  to  larger 
quarters  at  No.  7  Wall  Street,  but  it  soon 
became  apparent  that  the  Company  ought  to 
have  a  building  of  its  own,  and  President 
Strong  conceived  the  idea  of  erecting  a  monu- 
mental building  at  the  vortex  of  America's 
financial  life,  namely,  where  Wall,  Broad,  and 
Nassau  Streets  meet. 

The    manner    in    which    this    building    was 

IS 


226       Story  of  Trust  Companies 

planned  was  characteristic  of  the  Company. 
Every  detail  was  worked  out  in  advance.  The 
immense  task  of  razing  a  twenty  story  steel 
and  granite  building  to  make  room  for  the  new 
home  of  the  trust  company,  the  excavating, 
the  steel  construction,  and  the  final  completion 
of  the  building  to  the  last  detail,  were  carried 
out  with  remarkable  precision.  On  May  i8, 
and  19, 1 912,  the  Company  moved  to  its  new  and 
permanent  home.  The  building  and  the  banking 
quarters  therein  are  hardly  surpassed  by  any. 

Two  other  important  New  York  trust  com- 
panies were  acquired  during  recent  years  by 
the  Bankers ;  one,  the  Mercantile,  taken  over  in 
191 1 ;  the  other,  the  Manhattan,  acquired  in 
the  spring  of  191 2.  The  first  of  these  had  been 
a  trust  company  landmark  in  Broadway  since 
1873,  having  been  in  early  years  under  the 
Presidency  of  Louis  Fitzgerald,  and  later  of 
William  C.  Poillon;  while  the  other  dates  back 
to  1 87 1  and  was  for  many  years  under  the  able 
administration  of  John  I.  Waterbury. 

The  announced  policy  of  the  Company  at 
the  outset  was  to  conduct  a  trust  company  for 
trust  company  business,  and  to  make  no  attempt 


Policies  and  Methods  227 

to  compete  with  National  and  State  banks. 
It  was  also  decided  from  the  beginning,  to 
adopt  the  Clearing  House  rules  of  collection, 
and  to  maintain  the  cash  reserve  required  of 
member  banks.  As  soon  as  trust  companies 
became  eligible  for  membership  in  the  New 
York  Clearing  House  Association,  the  Bankers 
Trust  Company  became  a  member. 

When  the  American  Bankers  Association 
decided  to  establish  its  own  system  of  travelers' 
checks,  the  Bankers  Trust  Company  was 
appointed  agent  for  all  the  banks  issuing  those 
checks,  for  the  reason  that  this  company  was 
not  competing  with  National  and  State  banks, 
also  because  it  was  particularly  well  fitted  to 
undertake  the  work  on  account  of  its  strong 
international  banking  connections.  The  first 
"A.  B.  A."  cheque  was  issued  in  April,  1909; 
now  the  cheqiies  are  one  of  the  leading  forms  of 
travelers'  credit,  and  are  universally  accepted 
as  an  international  medium  of  exchange. 

The  clientele  of  the  Bankers  Trust  Company 
includes  many  industrial,  railroad,  and  public 
service  corporations;  many  foreign,  state,  and 
municipal  governments ;  numerous  banks,  bank- 


228      Story  of  Trust  Companies 

ers,  and  trust  companies ;  and  a  large  number  of 
state  institutions,  societies,  associations,  and 
individuals. 

A  long  period  elapsed  after  the  great  fire 
in  Chicago  in  1871,  before  bank  vaults  were 
again  put  to  the  test  of  withstanding  a  violent 
conflagration.  It  was  Baltimore's  turn,  how- 
ever, to  suffer  in  1904,  and  some  of  the  facts  of 
that  great  fire,  briefed  from  the  story,  as  told 
in  Trust  Companies,  are  subjoined. 

As  soon  as  the  ravages  of  the  fire  could  be 
measured,  came  an  anxious  inquiry  for  the  safety 
of  the  contents  of  bank  and  trust  company 
vaults.  As  to  the  latter,  one  of  several  an- 
nouncements was  that  although  eight  of  the 
City's  twelve  institutions  were  located  in  the  de- 
vastated section  their  safe  deposit  and  other 
vaults  had  remained  intact.  The  imposing 
building  of  the  Continental  Trust  Company 
proved  to  be  practically  fire  proof,  while  that 
of  the  Safe  Deposit  &  Trust  Company  stood 
almost  unharmed  amidst  the  charred  ruins  of 
its  neighbors. 

There  were  some  losses  due  to  the  premature 
opening   of   strong   boxes  which   had   not   yet 


The  San  Francisco  Catastrophe  229 

sufficiently  cooled,  but  generally  the  losses  of 
the  companies  were  well  covered  by  insurance. 
The  firmness  of  the  financial  credit  of  Baltimore 
institutions  was  shown  by  a  decrease  of  only 
about  two  points  in  quotations  for  their  stocks 
on  the  first  day  the  Exchange  resumed  business. 
The  trust  companies  of  the  city  not  only  came 
forward  with  financial  aid  to  the  public,  but 
gave  free  rental  to  various  banking  houses. 
One  company,  even  before  the  fire  had  run  its 
course,  opened  its  doors  and  provided  its 
patrons  with  emergency  sums  of  money  until 
regular  business  could  be  resumed. 

Two  years  later  San  Francisco's  financial 
interests  had  to  be  tried  out  under  even  sterner 
conditions  and  in  that  city  a  valuable  object 
lesson,  previously  learned,  was  availed  of,  for 
whereas  in  Chicago  and  in  Baltimore  many 
millions  of  dollars'  worth  of  securities  and  valu- 
ables had  been  destroyed  because  the  heated 
vaults  were  opened  too  soon,  thus  admitting 
oxygen,  the  same  mistake  was  not  made  by  the 
San  Francisco  bankers.  When  the  contents 
of  the  vaults  there  were  exposed  to  the  air, 
several  weeks  after  the  fire,  the  contents  were 


2^0      Story  of  Trust  Companies 

found  safe  and  intact.  Because  of  these  wise 
precautions,  the  financial  resources  of  San 
Francisco  suffered  little  material  hurt  and 
banking  was  resumed  without  any  serious  losses. 
The  formation  of  committees  of  bankers  for 
the  purpose  of  safeguarding  moneyed  interests 
and  preventing  runs  was  likewise  a  means  of 
restoring  confidence.  Withdrawals  of  deposits 
were  limited,  and  payments  made  by  certificate 
checks  drawn  by  banks  on  the  United  States 
Mint,  where  a  Clearing  House  Bank  was  formed 
for  temporary  needs. 

All  of  the  banks  and  trust  companies  opened 
temporary  offices  immediately,  and  most  of 
them  made  prompt  arrangements  for  the  re- 
construction of  headquarters  in  the  burned 
district.  The  massive  vaults  of  the  California 
Safe  Deposit  &  Trust  Company,  although 
buried  under  tons  of  debris,  were  found  intact 
with  their  contents  in  good  condition,  and  the 
same  was  true  of  the  vaults  and  safes  of  the 
Mercantile  Trust  Company.  Practically  all 
of  the  city's  financial  institutions  were  equipped 
with  modern  vaults,  and  they  successfully 
survived  the  test  of  both  fire  and  earthquake. 


CHAPTER  XVI 

THE  PANIC  OF    I907 

In  the  fall  of  the  year  following  the  San 
Francisco  fire,  with  almost  as  little  warning, 
and  with  a  sudden  violence,  unheard  of  in  the 
history  of  previous  financial  disturbances,  a  great 
panic  broke  upon  New  York  and  soon  spread 
steadily  to  all  parts  of  the  country.  In  ear- 
lier pages  several  instances  have  been  shown 
of  how  the  trust  companies  played  some  indivi- 
dual parts  during  the  depressions  of  the  past 
century,  but  the  panic  of  1907  was  in  its  very 
origin  a  tragedy  of  trust  company  difficulties. 

The  first  shock  to  financial  circles  came  on 

October    21st,    when    the    National    Bank   of 

Commerce  announced  that  it  would  no  longer 

clear  the  checks  of  the   Knickerbocker  Trust 

Company.      This  Company  closed  its  doors  at 

noon  on  the  following  day,  after  paying  out 

231 


232       Story  of  Trust  Companies 

$8,000,000  In  cash  to  its  depositors.  Strin- 
gency at  once  became  apparent  in  the  money 
market,  and  at  the  usual  opening  at  the  money 
post  of  the  Exchange  on  October  22d  not  a 
loan  could  be  negotiated  for  almost  an  hour, 
a  circumstance  unprecedented  in  the  history 
of  Wall  Street.  October  23d  saw  frenzied 
runs  on  the  Trust  Company  of  America  and  the 
Lincoln  Trust  Company,  the  former  during  the 
day  meeting  withdrawals  of  $13,000,000,  to  be 
followed  next  day  by  $9,000,000  more.  Some 
hope  was  inspired  by  a  midnight  meeting  of 
bankers  and  brokers,  with  J.  Pierpont  Morgan 
at  their  head,  who  promised  to  help  the  trust 
companies,  and  by  the  assurance  of  assistance 
from  the  Government. 

Nevertheless  conditions  on  the  Exchange 
during  the  day  of  October  24th  were  in  an 
unmistakable  state  of  panic  when,  at  2:15  p.m., 
a  pool  of  the  principal  banks,  acting  through 
J.  P.  Morgan  &  Company,  came  to  the  assist- 
ance of  the  money  market,  loaning  $25,000,000, 
with  such  prompt  and  beneficial  results  that 
stocks  began  immediately  to  recover  and  some 
measure  of  confidence  was  restored.     On  this 


Remedial  Measures  233 

day  also  the  National  banks  received  $19,000,000 
from  the  Government.  However,  on  the  next 
day,  October  25th,  occurred  fresh  evidences  of 
the  deep  seated  nature  of  the  trouble  in  the 
failure  of  three  banks  and  three  trust  companies, 
the  First  National  of  Brooklyn  being  the  first 
Clearing  House  member  to  suspend.  Then 
followed  the  issuance  of  Clearing  House  certi- 
ficates, which  course  had  not  been  resorted  to 
since  1893. 

With  the  engagement,  on  October  23d,  of 
$18,750,000  gold  for  import  the  situation  was 
greatly  relieved;  stocks  advanced,  but  runs 
on  the  banks  continued,  and  the  Clearing 
Houses  of  Boston,  Chicago,  and  many  other 
cities  began  to  issue  certificates.  Early  in 
November  the  first  importation  of  gold  arrived, 
and  at  the  same  time  announcement  was  made 
that,  upon  examination,  the  assets  of  the  be- 
sieged New  York  trust  companies  were  found 
to  be  more  than  sufficient  to  cover  all  deposits. 
The  hopeful  impression  thus  created  was,  how- 
ever, largely  offset  on  November  i6th  when, 
at  the  request  of  the  State  Superintendent  of 
Banks,  temporary  receivers  were  appointed  for 


234       Story  of  Trust  Companies 

the  Williamsburg  Trust  Company,  Jenkins 
Trust  Company,  International  Trust  Company, 
Borough  Bank  of  Brooklyn,  and  Brooklyn  Bank. 
A  relief  plan  announced  by  the  Government 
on  November  17th  provided  for  the  issuance 
of  $100,000,000  three  per  cent,  one-year  notes, 
and  $50,000,000  two  per  cent,  bonds,  the 
former  with  the  view  of  attracting  the  hoarded 
money  of  small  investors,  and  the  latter  as  the 
basis  of  new  bank  note  circulation.  Conditions 
during  the  last  week  of  November,  and,  indeed, 
until  the  end  of  1907,  w^hen  gold  imports  had 
reached  $100,000,000,  showed  a  decided  improv- 
ment,  judged  by  the  behavior  of  stocks;  and  a 
reassuring  bank  statement  was  issued  on  De- 
cember 28th,  showing  that  the  deficit  in  surplus 
reserves  was  $20,170,350,  a  reduction  of 
$11,580,650,  from  the  figure  for  the  previous 
week,  and  of  $33,933,250  from  that  for  the 
week  ending  November  23d,  the  worst  during 
the  panic.  At  the  same  time,  while  the  recov- 
ery of  the  stock  market  was  rapid,  the  gains 
in  general  represented  less  than  one  fourth  of 
the  recessions  in  price  which  had  occurred 
during    the    preceding    twelve    months.     The 


Committee  of  Company  Pleads  235 

Comptroller  of  the  Currency  at  the  close  of  the 
year  made  the  following  statement : 

"From  October  20th  to  December  30th, 
there  have  been  but  sixteen  suspensions  or 
failures  of  national  banks.  Of  these,  two 
have  resumed  and  several  more  should  do 
so  in  the  near  future.  Contrast  this  with  the 
panic  of  1893,  when  one  hundred  and  sixty 
national  banks  failed,  and  of  these,  fifty-four 
were  never  re-opened." 

Meanwhile  trust  company  suspensions  In 
1907,  outside  of  New  York,  were  few  and  unim- 
portant, although  the  Union  Trust  Company  of 
Providence  closed  its  doors  during  the  severest 
strain  of  the  panic,  and  was  not  re-opened  for 
business  until  May,  1908. 

All  during  the  period  of  severest  depression 
committees  of  bankers  labored  in  the  larger 
cities,  in  and  out  of  season,  toward  establishing  a 
clear  understanding  of  internal  conditions  in  in- 
stances of  ill-managed  or  temporarily  weakened 
banks  and  trust  companies. 

In  New  York  the  Trust  Company  Committee 
consisted  of  such  able  financiers  as: 

Edward  King,  of  the  Union,  who  acted  as 


236       Story  of  Trust  Companies 

Chairman;  John  W.  Castles,  of  the  Guaranty; 
John  I.  Waterbury,  of  the  Manhattan;  Edwin 
S.  Marston,  of  the  Farmers' ;  James  N.  Wallace, 
of  the  Central;  and  Edward  W.  Sheldon,  of 
the  United  States  Trust  Company. 

These  heads  of  great  institutions,  confronted 
by  problems  which  promised  only  "  to  perplex 
and  dash  maturest  counsels,"  labored  ceaselessly 
in  efforts  to  bring  order  out  of  the  chaotic 
conditions  involving  their  neighbors,  the 
weaker  trust  companies.  There  were  all-night 
meetings  of  the  Committee,  Mr.  Morgan  at- 
tending these  and  laboring  tirelessly  to  adjust 
the  difficulties.  These  meetings  were  followed 
by  prolonged  daily  conferences  with  the  manage- 
ment of  the  New  York  Clearing  House;  the 
securities  and  loans  of  some  of  the  embarrassed 
companies  were  taken  under  physical  control, 
and  were  listed,  studied,  and  reported  upon 
with  recommendations  that  the  more  deserving 
concerns  be  given  financial  aid.  Never  in  the 
history  of  New  York  banking  affairs  has  there 
been  a  crisis  requiring  efforts  so  earnest  and  so 
ably  directed  toward  co-operation;  never  has 
there  been  a  group  of  men,   made  up   of  the 


"Knickerbocker"  and  "Columbia"  237 

heads  of  competitive  corporations,  who  so  un- 
tiringly set  themselves  to  the  task  of  solving 
a  series  of  vast  problems  in  tangled  finance. 
The  aid  thus  furnished  was  a  powerful  influence 
in  bringing  about  a  speedy  restoration  of  public 
confidence  everywhere,  and  it  is  safe  to  assert 
that  for  generations  to  come  the  efforts  and 
accomplishments  of  the  New  York  Trust 
Company  Committee  of  1907  will  be  gratefully 
remembered  by  the  entire  banking  and  business 
community. 

A  few  failures  occurred  during  1908,  but  a 
general  readjustment  ensued  everywhere  in 
financial  and  commercial  lines.  Although  the 
effect  on  industries  had  been  almost  complete 
paralysis  for  a  time,  specie  payments  were  not 
suspended  by  the  banks  as  in  1857,  1873,  and 
1893,  and  with  more  despatch  than  might  have 
been  anticipated,  considering  former  panic  exper- 
iences, the  causes  of  the  trouble  were  removed, 
the  over  extended  institutions  were  in  some  cases 
liquidated,  in  others  re-organized,  and  the 
country  shortly  settled  down  to  more  conserva- 
tive plans  of  making  loans  and  investments. 

The  Knickerbocker  Trust  Company's  seventy 


238       Story  of  Trust  Companies 

odd  millions  of  dollars  of  deposits  suffered  a 
great  curtailment,  but  the  distress  of  the  depo- 
sitors was  mitigated  in  some  measure  by  the 
wise  and  energetic  efforts  of  a  committee, 
headed  by  Mr.  Morgan's  son-in-law,  Herbert 
L.  Satterlee.  The  Company  re-opened  some 
weeks  after  its  enforced  closing  and,  within  a 
few  months,  paid  every  depositor  in  full  with 
interest.  In  19 12  it  amalgamated  with  another 
company,  now  to  be  described. 

The  Columbia  Trust  Company  holds  a 
charter  dating  back  to  the  seventies,  although 
the  trust  comj)any  privileges  it  conferred  were 
not  availed  of  until  the  year  1905.  Robert 
S.  Bradley  acted  as  the  first  President,  being 
succeeded  in  1908  by  Willard  V.  King.  The 
offices  have  been  successively  at  No.  20  Nassau 
Street,  No.  135  Broadway  and,  since  1912,  at 
No.  60  Broadway. 

In  1 912  the  interests  of  the  Columbia  Trust 
Company  and  the  Knickerbocker  Trust  Com- 
pany were  united,  and  Charles  H.  Keep  became 
Chairman  of  the  Board,  having  been  President 
of  the  newer  and  stronger  Knickerbocker  Trust 
Company. 


Astor  Trust  Company  239 

The  Columbia  Trust  Company  is  to-day  one 
of  the  companies  in  the  one  hundred  million 
dollar  class,  the  aggregate  of  its  statement 
having  reached  this  figure  in  the  spring  of  1 91 6. 
Ten  years  ago  its  capital  was  $1,000,000,  its 
surplus  and  undivided  profits  a  shade  over  the 
same  amount,  its  total  resources  $7,000,000. 
In  1 91 2  it  had  accumulated  another  million 
of  surplus  and  undivided  profits,  and  had  depo- 
sits of  about  $20,000,000.  In  191 6  it  reported 
two  millions  of  capital,  eight  millions  of  surplus 
and  undivided  profits,  and  nearly  one  hundred 
and  five  millions  of  dollars  of  total  assets  and 
liabilities.  It  is  paying  dividends,  including 
extras,  of  twenty-eight  per  cent,  per  annum. 
It  maintains  a  branch  office  at  Fifth  Avenue, 
corner  of  Thirty-fourth  Street,  one  in  Harlem 
at  the  corner  of  Lenox  Avenue  and  125th 
Street,  and  in  the  Borough  of  the  Bronx  at 
Third  Avenue  and  148th  Street. 

Among  large  New  York  trust  institutions 
the  youngest  is  an  uptown  company  incor- 
porated in  1907.  This  is  the  Astor  Trust  Com- 
pany at  No,  389  Fifth  Avenue,  corner  of  Thirty- 
sixth  Street;  an  imposing  building,  now  being 


240       Story  of  Trust  Companies 

erected  at  the  southeast  corner  of  Fifth  Avenue 
and  Forty-second  Street — one  of  the  busiest 
sections  of  the  city — will  in  the  future  be  its 
home.  E.  C.  Converse  has  been  President  from 
the  beginning. 

Its  personnel  is  of  the  highest  character  and 
the  growth  of  accounts  has  been  phenomenal 
from  the  start.  During  the  first  year  of  busi- 
ness the  resources  were  shown  in  the  surprising 
aggregate  of  $11,000,000;  by  1916  they  had 
amounted  to  $35,000,000.  The  present  capital 
is  $1,250,000,  the  surplus  and  undivided  profits 
over  $1,700,000. 

The  trust  company  idea,  while  essentially 
a  development  within  the  United  States,  has 
been  made  the  model  for  several  incorporations 
abroad.  In  Canada  there  are  about  twenty 
companies  at  the  present  writing,  ranging  from 
Halifax  to  Vancouver.  Few  of  these,  however, 
receive  deposits  except  in  trust.  A  number  have 
extensive  branch  office  connections.  Among  the 
leading  companies  of  the  Dominion,  may  be 
mentioned  the  Toronto  General  Trusts  Corpora- 
tion, dating  back  to  1882,  and  The  Royal  Trust 
Company  of  Montreal,  incorporated   in  1899. 


Foreign  Companies  241 

Hawaii  is  the  home  of  seven  institutions, 
and  The  Trust  Company  of  Cuba  has  been 
operated  in  Havana  since  1905.  Three  years 
ago,  in  1 91 3,  an  organization  was  effected  in 
the  City  of  Panama  under  the  title  Continental 
Banking  Trust  Company,  with  branches  in 
Bocas  del  Toro  and  David,  Panama.  London, 
England  has  its  British  Reserve  Trust  Company, 
and  the  Australian  field  is  served  by  the  Trustee, 
Executors  and  Agency  Company  of  Melbourne. 
A  financial  writer  some  years  ago  presented  the 
claim  that  the  Industrial  Bank  of  Japan,  located 
in  Tokio,  conducts  a  business  which  in  many 
respects  resembles  the  plan  of  operation  pursued 
by  American  trust  companies. 
16 


CHAPTER  XVII 

BRIEF     SKETCHES     OF     TWENTY-SIX     REPRESEN- 
TATIVE INSTITUTIONS 

In  the  foregoing  chapters  the  thirty  largest 
trust  companies  in  the  Country  have  been  de- 
scribed, with  sketches  of  some  few  institutions, 
fifteen  in  number,  which,  because  of  their  age 
or  organization  in  representative  parts  of  the 
country,  have  served  to  make  a  continuing 
story  of  development.  On  June  30,  191 6,  there 
were  twenty-five  other  institutions  which  one 
year  previous  had  issued  statements,  as  set 
forth  in  the  United  States  Mortgage  &  Trust 
Company's  book.  Trust  Companies  of  the 
United  States,  amounting  in  each  case  to  fifteen 
millions  of  dollars  and  upwards.  These  twenty- 
five  companies,  because  of  their  commanding 
position  in  these  days,  must  be  given  due  men- 
tion, and  it  is  a  source  of  regret  that  the  scope 

242 


* 


Some  California  Companies     243 

of  this  brief  story  will  not  permit  of  reference 
to  the  many  hundreds  of  other  representative 
concerns  which  are  notable  as  having  accom- 
plished, in  degree,  the  same  honorable  successes 
as  have  been  reached  by  the  seventy  largest 
companies  chosen  for  purposes  of  specific 
narratives.  Grouped  from  West  to  East, 
rather  than  according  to  age  or  size,  these 
twenty-five  concerns  (with  the  addition  of  one 
large  Chicago  institution  not  having  the  word 
"trust"  included  in  its  corporate  title)  will  be 
found  to  rate  from  forty-one  millions  of  present 
resources  downward,  and  to  be,  in  a  number  of 
instances,  first  in  rank  among  trust  companies 
within  certain  cities  not  heretofore  mentioned. 
The  Savings  Union  Bank  &  Trust  Company 
of  San  Francisco,  was  incorporated  in  1862  as 
the  San  Francisco  Savings  Union.  In  Septem- 
ber, 1 910,  it  absorbed  the  Savings  &  Loan 
Society,  incorporated  in  1857,  and  changed  its 
name  to  Savings  Union  Bank  of  San  Francisco. 
The  bank  offices  were  originally  located  on 
California  Street,  but  in  January,  191 1,  were 
moved  into  a  newly  completed  building  at  the 
corner  of  Grant  Avenue,  Market,  and  O'Farrell 


244      Story  of  Trust  Companies 

Streets,  the  recognized  retail  shopping  center. 
In  December,  191 1,  it  enlarged  its  corporate 
powers  to  include  trust  business,  and  the  title 
was  changed  to  Savings  Union  Bank  &  Trust 
Company.  The  capital  is  $1,500,000,  the 
surplus  and  undivided  profits  $2,230,000,  and 
the  total  resources  are  well  over  $41,000,000. 
John  S.  Drum  has  been  President  of  this  insti- 
tution since  March,  19 10. 

The  Los  Angeles  Trust  Company  was  in- 
corporated in  August,  1902,  owning  the  eight 
story  office  building  at  the  northwest  corner 
of  Second  and  Spring  Streets,  where  trust  and 
safe  deposit  departments  are  maintained.  On 
March  i,  1903,  the  Company's  banking  depart- 
ment had  its  inception,  and  in  September,  1909, 
the  name  of  the  institution  was  changed  to 
Los  Angeles  Trust  &  Savings  Bank. 

Having  sold  the  location  at  Second  and 
Spring  Streets,  in  1909,  the  Company  moved  to 
the  Central  Building  at  the  southwest  comer  of 
SLxth  and  Main  Streets.  There  it  absorbed 
the  business  of  the  Metropolitan  Bank  &  Trust 
Company,  which  was  occupying  quarters  on 
the  site  of  the  present  location.     The  building 


Los  Angeles  Institutions        245 

was  immediately  torn  down,  and  the  handsome 
structure  now  occupied  by  the  Los  Angeles 
Trust  &  Savings  Bank  was  erected. 

At  the  time  of  the  consolidation,  the  combined 
deposits  amounted  to  approximately  $6,000,000, 
while  the  latest  published  statement,  as  of 
July  I,  1916,  shows  deposits  of  $25,089,817.20. 

The  Los  Angeles  Trust  &  Savings  Bank 
moved  to  its  present  location  on  August  14, 
191 1, the  banking  and  trust  departments  occupy- 
ing the  main  floor,  with  the  safe  deposit  de- 
partment beneath.  J.  C.  Drake  has  been  the 
President  of  the  institution  since  1903,  and 
under  his  able  management  it  has  grown  to  be 
the  second  concern  of  its  kind  in  size  in  the 
City.  The  present  capital  is  $1,500,000,  the 
surplus  and  undivided  profits,  $1,640,000. 

The  German  American  Trust  &  Savings 
Bank  of  Los  Angeles  dates  back  as  a  savings 
institution  to  1890,  as  a  trust  company  to  191 2, 
and  is  presided  over  by  M.  N.  Avery.  Its 
offices  are  located  at  Seventh  and  Spring  Streets, 
and  its  latest  balance  sheet  footed  for  nearly 
$25,000,000,  including  $1,000,000  of  capital, 
and  $1,346,000  of  surplus  and  undivided  profits. 


246      Story  of  Trust  Companies 

The  German-American  has  upwards  of  fifty- 
thousand  depositors'  accounts  on  its  books  at 
the  present  time. 

The  Commerce  Trust  Company  of  Kansas 
City  has  been  since  1906  the  best  known  institu- 
tion in  that  locality.  It  is  in  the  fifteen-story 
Commerce  Trust  Building  at  Tenth  and  Wal- 
nut Streets.  The  first  President  was  Dr.  W. 
S.  Woods,  but  since  1909  that  office  has  been 
held  by  W.  T.  Kemper.  The  Vice-Presidents 
areW.  S.  McLucas,  R.  C.  Menefee,  andTownley 
Culbertson. 

The  capital  has  always  been  $1,000,000,  and 
there  is  a  trifle  more  than  this  sum  in  surplus 
and  undivided  profit  accounts.  The  resources 
on  June  30,  1916  totaled  $22,868,121.47. 

An  interesting  feature  of  the  Company's 
operations  is  an  "accumulative  savings  plan." 
Under  this  there  are  certificates  issued  for 
$100,  $200,  $500,  or  $1000,  the  depositor's  pay- 
ments to  be  received  monthly  for  a  period  of 
seven  years,  interest  and  certain  additional 
credits  being  allowed  at  maturity.  In  the 
instance  of  a  $500  certificate,  eighty-four 
monthly   payments  of   $5.35   each   or   a   total 


Hibernia  of  New  Orleans       247 

investment  of  $44940,  at  maturity  have  a 
worth  of  $500,  plus  a  2  per  cent,  bonus. 

The  Hibernia  Bank  &  Trust  Company  of 
New  Orleans,  while  not  claiming  to  date  back 
to  as  early  a  period  as  its  neighbor,  the  Canal 
Bank  &  Trust  Company,  is  the  foremost 
institution  of  its  kind  in  New  Orleans.  It 
occupies  a  beautiful  home  at  the  corner  of 
Carondelet  and  Gravier  Streets,  and  since  1904 
has  been  under  the  presidency  of  John  J. 
Gannon.  Prior  to  that  time  John  W.  Castles, 
afterwards  the  chief  executive  of  the  Guar- 
anty Trust  Company,  and  later  of  the  Union 
Trust  Company  of  New  York,  acted  as 
President. 

The  Company  has  $1,500,000  of  capital, 
over  $2,000,000  of  surplus  and  undivided  pro- 
fits, and  approximately  $23,000,000  of  aggregate 
assets  and  liabilities. 

In  Chicago,  the  Northern  Trust  Company, 
at  No.  50  South  La  Salle  Street,  ranks  to-day 
in  the  forty  million  dollar  class.  It  was  or- 
ganized in  1889,  and  its  balance  sheet  footed 
in  1896  for  $10,000,000;  in  1906,  for  almost 
$31,000,000,  and  in  1916  for  $41,000,000.     The 


248       Story  of  Trust  Companies 

capital  is  $2,000,000,  and  the  surplus  and  undi- 
vided profits  are  upwards  of  $2,800,000. 

The  Company  has  had  two  Presidents,  Byron 
L.  Smith  down  to  19 13,  and  Solomon  A.  Smith 
since  that  time. 

In  1907  the  Chicago  and  other  Western  busi- 
ness of  the  investment  banking  house  of  N. 
W.  Harris  &  Company,  founded  in  1882,  had 
so  increased  as  to  warrant  its  incorporation 
as  a  bank  and  trust  company,  the  new  title 
being  Harris  Trust  &  Savings  Bank.  By 
191 1  its  deposits  exceeded  $19,000,000.  In 
the  fall  of  that  year  the  Company  moved  into 
new  quarters  known  as  the  Plarris  Trust  Build- 
ing, a  structure  combining  the  acme  of  modern 
architecture  with  convenience  and  safety.  It 
is  noteworthy  that  at  the  formal  dedication  of 
the  building,  the  Twentieth  Century  Limited 
was  specially  chartered  to  carry  the  stockhold- 
ers and  employees  of  the  New  York  and  Boston 
associated  banldng  houses  to  Chicago,  where 
a  banquet  was  given  in  the  main  lobby  of  the 
bank  in  honor  of  the  event. 

Albert  W.  Harris  is  President,  having  suc- 
ceeded  Norman  W.   Harris,   the  founder  and 


Harris  Trust  &  Savings  Bank  249 

first  president,  when  be  became  Chairman  of 
the  Board;  the  latter  died  July  15,  191 6.  The 
19 1 6  figures  of  capital,  surplus  and  undivided 
profits,  and  total  resources  are  reported  at 
$1,500,000,  $3,500,000,  and  $35,000,000,  respect- 
ively. Its  sales  of  investment  bonds  are  un- 
doubtedly the  largest  made  by  any  institution 
west  of  New  York  City. 

The  Chicago  Title  &  Trust  Company 
located  at  No.  69  West  Washington  Street  in 
that  City,  in  a  building  bearing  the  Company's 
name,  goes  back  in  its  history  to  the  abstract 
business  conducted  by  Rees  &  Rucker  in 
1847.  Under  various  succeeding  co-partner- 
ships a  title  business  was  built  up  until  1901, 
when  a  merger  occurred  of  all  the  title  companies 
then  in  existence  in  Cook  County,  Illinois, 

The  President  of  the  institution  is  Harrison 
B.  Riley,  and  its  capital  is  $5,600,000,  with 
surplus  and  undivided  profits  of  $3,800,000. 
The  Company  makes  abstracts  of  title,  guar- 
antees titles  to  real  estate  and  does  a  general 
trust  business.     It  has  never  accepted  deposits. 

Among  Chicago  trust  companies  mention 
might    properly    be    made    of    the  Hibernian 


250       Story  of  Trust  Companies 

Banking  Association  at  No.  208  South  LaSalle 
Street.  George  M.  Reynolds  is  President,  and 
the  institution,  while  not  containing  the  word 
"trust"  in  its  title  is  amenable  to  the  laws  of 
Illinois  covering  trust  companies,  and  as  an 
association  doing  a  trust  business,  is  reported 
nowadays  in  the  thirty  million  dollar  class. 
It  is  a  concern  worthy  of  being  classed  among 
the  large  trust  companies  of  the  country. 

Third  in  size  among  Cleveland's  trust  insti- 
tutions at  the  present  writing  stands  the  Guard- 
ian Savings  &  Trust  Company  at  No.  322 
Euclid  Avenue.  It  was  organized  in  1894,  and 
has  had  two  Presidents,  John  F.  Whitelaw 
until  1898,  and  H.  P.  Mcintosh  since  that  year. 

In  1904  there  was  an  absorption  of  the  Federal 
Trust  Company.  For  a  young  institution  the 
growth  has  been  remarkable.  The  balance 
sheet  of  1896  totaled  $1,125,000;  in  1906,  less 
than  $15,000,000,  and  in  1916,  over  $37,000,000. 
The  final  figure  includes  $2,000,000  of  capital, 
and  $2,276,800  of  surplus  and  undivided  profits. 

New  and  larger  quarters  are  now  being 
constructed  at  Nos.  619-637  EucHd  Avenue, 
which  will  provide  ample  room  for  the  Cora- 


Central  Western  Concerns      251 

pany's  rapidly  increasing  business.  These  new 
quarters  are  to  be  ready  for  occupancy  about 
December  i,  191 6. 

The  largest  institution  of  its  kind  in  South- 
em  Ohio,  the  Union  Savings  Bank  &  Trust 
Company,  of  Cincinnati,  was  organized  in  1890. 
Its  Presidents  in  succession  have  been  J.  G. 
Schmidlapp  (Chairman  of  the  Board  since 
1 9 13)  and  Clifford  B.  Wright.  The  offices  are 
at  the  well-known  corner  of  Fourth  and  Walnut 
Streets.  From  a  one-million-dollar  institution 
in  1896,  the  resources  have  increased  in  twenty 
years  to  a  total  of  approximately  twenty-two 
and  one  half  millions.  Among  the  liabilities 
are  $1,000,000  of  capital  and  nearly  $3,000,000 
of  surplus  and  undivided  profits. 

The  Fidelity  Title  &  Trust  Company,  Pitts- 
burgh, having  its  home  at  No.  341  Fourth  Ave- 
nue, was  engaged  in  the  title  and  trust  business 
until  1903,  when  it  sold  the  title  business,  con- 
tinuing only  in  the  trust.  John  B.  Jackson 
was  its  President  for  twenty  years  and  later 
James  J.  Donnell  was  elected  President  and 
since  19 13  has  been  Chairman  of  the  Board. 
The  President  at  this  time  is  Cyrus  S.  Gray. 


252       Story  of  Trust  Companies 

The  Company's  original  capital  was  $1,000,- 
000,  which  was  doubled  a  little  over  ten  years 
ago.  The  surplus  and  undivided  profits  are 
now  $6,000,000  and  the  total  resources  are  $24,- 
500,000.  It  has  a  trust  business  aggregating 
more  than  $63,000,000.  It  has  not  taken  over 
any  other  financial  companies  during  its  exist- 
ence. 

The  Colonial  Trust  Company  of  Pittsburgh, 
located  at  No.  317  Fourth  Avenue,  dates  back  to 
1902.  Its  first  President  was  Joshua  Rhoades, 
and  since  1904  that  office  has  been  held  by 
E.  H.  Jennings. 

On  June  30,  191 6,  the  Company  reported 
$2,600,000  capital,  $3,300,000  surplus  and 
undivided  profits,  and  $18,000,000  of  resources. 

Baltimore's  foremost  trust  company  has  for 
years  been  the  Mercantile  Trust  &  Deposit 
Company  at  Calvert  and  German  Streets.  It 
w^as  incorporated  in  1884  and  has  had  two 
Presidents,  John  Gill  of  R.  down  to  1910  and 
A.  II.  S.  Post  since  that  time. 

The  original  capital  of  $500,000  is  now 
$1,500,000,  and  there  are  surplus  and  undivided 
profits    of    $3,200,000.     The    total    resources 


Rochester  Institutions  253 

have  nearly  doubled  since  1908  and  In  191 6 
were  $20,531,537.13. 

This  Company  has  the  largest  capital  and 
surplus  of  any  financial  institution  in  Maryland 
or  any  Southern  State. 

The  Commercial  Trust  Company  of  Phila- 
delphia, incorporated  in  1894,  was  originally 
located  in  the  Drexel  Building,  and  after  two 
years  of  operations  there,  under  Thomas  Froth- 
ingham  as  President,  reported  resources  of  some- 
thing more  than  $4,500,000;  by  1906  the  total 
was  $12,000,000,  and  in  1916,  $27,000,000. 

Horatio  G.  Lloyd  succeeded  to  the  presidency 
in  1900,  and  since  1 910  Thomas  DeWitt  Cuyler 
has  served  in  that  capacity. 

The  present  offices  are  on  the  ground  floor 
of  the  Arcade  Building,  facing  the  City  Hall. 
The  present  capital  is  $1,000,000;  the  surplus 
and  undivided  profits,  $1,175,000. 

Rochester  has  two  great  trust  companies, 
the  elder,  the  Rochester  Trust  &  Safe  Deposit 
Company,  organized  in  1888.  From  a  com- 
pany of  five  milUons  of  dollars  in  1896,  this 
concern  has  shown  an  increase  during  twenty 
years  of  nearly  five  times  over. 


254       Story  of  Trust  Companies 

The  capital  in  191 6  was  $500,000,  the  surplus 
and  undivided  profits,  $871,000,  and  total 
resources,  $23,610,000. 

Originally  quartered  at  No.  25  Exchange 
Street,  the  institution  recently  removed  to  a 
permanent  home  in  the  fine  granite  building 
at  the  southwest  corner  of  Main  and  Exchange 
Streets. 

The  Presidents  have  been  J.  Moreau  Smith, 
V.  Moreau  Smith,  and  the  present  incumbent, 
William  C.  Barry.  Robert  C.  Watson  is  Vice- 
President  and  Secretary. 

The  Security  Trust  Company  of  Rochester 
was  incorporated  in  1894  and  has  had  two 
Presidents,  Edward  Harris  and  James  S.  Wat- 
son. Like  its  neighbor,  as  above  described, 
the  Company's  successive  reports  have  shown 
marked  growth.  The  total  resources  in  1896 
were  less  than  $1,500,000;  in  1906,  $11,500,000, 
and  in  1916  nearly  $16,500,000.  The  present 
capital  is  $300,000,  surplus  and  undivided 
profits  are  $546,000,  and  the  shares  of  the  Com- 
pany have  sold  in  recent  years  at  as  high  a  rate 
as  600  per  cent. 

Syracuse,   New  York,   claims  the  honor  of 


Hoboken  Companies  255 

having  been  the  first  city  outside  of  the  very- 
large  ones  to  have  founded  in  its  midst  one  of 
our  great  modern  trust  companies.  This  was 
the  Trust  &  Deposit  Company  of  Onondaga, 
chartered  in  1866.  Its  early  Presidents  were 
Dudley  B.  Phelps  and  George  Barnes.  After- 
ward, from  1896  to  1 9 13,  this  title  was  held  by 
Francis  Hendricks.  Since  that  date  the  admin- 
istration has  been  vested  in  Arthur  W.  Loasby. 

From  1876  to  1886  a  doubling  occurred  in 
the  Company's  total  resources,  the  figures 
showing  growth  from  one  half  a  million  of 
dollars  to  one  and  a  quarter  millions.  By 
1896  they  nearly  doubled  again  to  the  sum  of 
two  millions.  During  the  next  ten  years  the 
same  process  occurred  twice,  showing  a  total 
of  nearly  ten  milHons  of  dollars.  At  this  period 
the  Company's  capital  stock  was  $100,000, 
but  was  subsequently  increased  and  now  stands 
at  $1,000,000,  with  surplus  and  undivided 
profits  and  other  assets  of  $666,000,  while  the 
resources  have  again  increased  almost  twofold 
during  the  ten  years  since  1906  and  are  to-day 
the  substantial  sum  of  $18,876,506.15. 

Hoboken  is  the  home  of  two  great  trust  com- 


256       Story  of  Trust  Companies 

panics.  One  of  these,  the  Hudson  Trust  Com- 
pany, dates  back  to  1890  and  is  domiciled  in 
West  Hoboken  with  a  branch  office  in  Hoboken. 
S.  Bayard  Dod  was  President  until  1899. 
Since  that  time  Myles  Tierney  has  held  the 
office. 

The  Company's  $500,000  of  capital  carries 
with  it  surplus  and  undivided  profits  of 
$1,643,000,  and  its  aggregate  resources  are 
$21,257,501.45. 

The  Trust  Company  of  New  Jersey  began 
business  in  Hoboken  in  1899.  It  has  been 
constantly  imder  the  Presidency  of  General 
William  C.  Heppenheimer.  Ten  years  ago  the 
resources  were  less  than  five  millions  of  dollars ; 
in  1916  they  were  reported  at  $21,640,065.84. 
Included  in  this  sum  were  investments  of  capital 
amounting  to  $600,000,  which  sum  carried  with 
it  $948,000  of  surplus  and  undivided  profits. 
During  the  year  19 13  the  Trust  Company  of 
New  Jersey  absorbed  three  neighboring  institu- 
tions in  Jersey  City.  These  were  the  People's 
Safe  Deposit  &  Trust  Company,  the  Bergen 
&  Lafayette  Trust  Company,  and  the  Carteret 
Trust  Company. 


Two  Brooklyn  Concerns        257 

A  New  York  institution  catering  largely  to 
wholesale  trade  has  carried  on  a  trust  business 
since  1902  under  the  title  of  Broadway  Trust 
Company.  It  was  orginally  located  at  No. 
756  Broadway,  but  in  191 1  removed  to  No. 
754,  directly  adjoining  the  Wanamaker  stores. 
It  now  has  its  main  offices  in  the  Woolworth 
Building  at  No.  233  Broadway,  and  another 
branch  in  Chambers  Street  at  the  comer  of 
West  Broadway.  There  are  three  Long  Island 
branches,  in  the  Flatbush  section  of  Brooklyn, 
in  Long  Island  City,  and  in  Borough  Park. 

The  capital  is  $1,500,000,  surplus  and  undi- 
vided profits  $937,000,  and  the  total  resources 
are  upwards  of  $28,000,000,  as  against  less  than 
$5,000,000  ten  years  ago,  in  1906. 

The  Borough  of  Brooklyn  contains  two 
institutions  which  in  point  of  size  rank  well 
up  with  the  pioneer  institution  already  de- 
scribed, the  Brooklyn  Trust  Company.  Both 
were  incorporated  in  1889.  The  People's  Trust 
Company  is  next  in  size  after  the  institution 
named  and  is  in  the  thirty-million-dollar  class 
as  regards  resources,  having  grown  over  eleven 
millions  in  the  past  ten  years,  whereas  an  ag- 
17 


258       Story  of  Trust  Companies 

gregate  of  less  than  nine  millions  was  reported 
twenty  years  ago,  in  1896. 

Owing  to  the  rapid  expansion  of  the  Com- 
pany's business  the  offices  were  in  1890  moved 
from  No.  201  Montague  Street  to  larger  quar- 
ters at  No.  172,  and  in  1906  a  commodious  and 
distinctive  building  was  erected  in  the  same 
street  at  No.  181.  The  Presidents  have  been 
William  H.  Murtha  from  the  beginning  to 
1 89 1,  Felix  Campbell  down  to  1902,  Edward 
Johnson  to  1907,  and  Charles  A.  Boody  since 
that  time.  An  important  bank  absorption 
occurred  in  1906  when  the  Wallabout  Bank  of 
Brooklyn  was  acquired. 

The  Kings  County  Trust  Company  at  No. 
342  Fulton  Street,  Brooklyn,  located  in  the 
busiest  part  of  that  borough,  is  an  institution 
with  $500,000  capital  and  over  $2,700,000  of 
surplus  and  undivided  profits.  The  relative 
figures  of  total  resources  for  1896,  1906,  and 
1916  have  been  $7,000,000,  $14,000,000,  and 
$27,000,000,  respectively.  Julian  D.  Fairchild 
has  been  President  since  1893. 

A  notable  testamentary  trust  was  that  cre- 
ated under  the  will  of  the  late  Mayor  William 


"American"  of  Boston         259 

J.  Gaynor  who  died  in  1914,  making  the  Kings 
County  Trust  Company  his  sole  executor  and 
trustee. 

In  concluding  the  separate  sketches  of  the 
country's  seventy  largest  trust  companies, 
Boston  is  found  to  be  the  home  of  three  impor- 
tant concerns  not  hereinbefore  described. 

The  American  Trust  Company  at  No.  50 
State  Street  has  been  in  business  since  1881 
and  has  had  four  Presidents,  Ezra  H.  Baker, 
who  served  until  1886;  S.  Endicott  Peabody, 
until  1903;  Noah  W.  Jordan,  until  1906;  and 
Russell  G.  Fessenden  from  1907  to  the  present 
time.  Mr.  Fessenden  also  holds  the  title  of 
Chairman  of  the  Board. 

The  Company  in  1896  reported  less  than 
$5,000,000  of  resources;  ten  years  later  the 
total  was  nearly  four  times  that  sum.  In  191 6 
the  aggregate  was  nearly  $25,000,000.  The 
capital  has  been  $1,000,000  from  the  beginning 
and  this  carries  with  it  at  the  present  time, 
$2,386,000  of  surplus  and  undivided  profits, 
all  of  which  has  been  earned.  The  Company 
conducts  a  large  trust  and  transfer  department, 
and  more  than  one  hundred  and  fifty  corpora- 


26o      Story  of  Trust  Companies 

tions  and  associations  employ  the  Company 
either  as  transfer  agent  or  registrar. 

In  June,  1891,  a  group  of  Boston  business 
men  representing  interests  identified  with  the 
Third  National  Bank  of  that  city  met  as  a 
Board  of  Directors  and  inaugurated  the  busi- 
ness of  the  State  Street  Trust  Company.  The 
institution  was  opened  for  business  on  the  first 
day  of  the  following  month. 

The  original  offices  were  in  the  basement  of 
the  Exchange  Building  directly  beneath  the 
present  quarters  of  the  Federal  Reserve  Bank. 
In  1900  the  Company  moved  to  the  Union 
Building  at  the  corner  of  State  and  Exchange 
Streets.  Two  years  later  a  branch  office  was 
opened  on  Massachusetts  Avenue,  and  in  1905 
the  Company  erected  a  handsome  building  at 
the  corner  of  Massachusetts  Avenue  and  Boyl- 
ston  Street.  This  office  is  equipped  with  modem 
safe  deposit  vaults  and  at  the  present  time  the 
needs  of  about  three  thousand  depositors  are 
served.  During  February,  191 6,  the  Company 
absorbed  the  Paul  Revere  Trust  Company, 
and  to-day  has  four  separate  offices. 

The    Company    now    reports    $1,000,000   in 


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**  Commonwealth  "  of  Boston    261 

capital  stock  and  $1,638,000  in  surplus  and 
undivided  profits.  Its  total  resources  on  Octo- 
ber 31,  1896,  were  $1,524,67348.  By  June  30, 
1906,  they  amounted  to  $9,535,781.73.  The 
growth  of  the  Company  down  to  June  30,  191 6, 
is  evidenced  by  a  volume  of  total  resources 
amounting  to  $28,803,374.87. 

IMoses  Williams  was  the  first  President  and 
has  been  Chairman  of  the  Board  since  1913, 
Allan  Forbes  having  succeeded  to  the  presidency 
in  1911. 

The  Commonwealth  Trust  Company  began 
doing  business  in  Boston  at  its  offices,  No.  88 
Summer  Street,  in  1904,  with  a  capital  of  one 
million  dollars.  The  Colonial  National  Bank 
of  Boston  was  absorbed  by  this  institution 
during  the  first  year  of  its  existence  and  the 
growth  has  been  in  marked  degree  at  all  times, 
it  now  having  four  separate  offices  doing  busi- 
ness in  different  parts  of  the  city. 

The  assets  have  doubled  within  the  past  ten 
years  and  to-day  amount  to  the  sum  of  $22, 
787,949.36.  The  capital  has  always  been  $1 ,000,- 
000  and  there  is  a  present  surplus  fund,  with 
additions  of  undivided  profits,  of  $729,203.12. 


262       Story  of  Trust  Companies 

The  Company  has  absorbed  two  other  institu- 
tions in  recent  years,  the  New  England  National 
Bank  in  1909,  and  the  Hamilton  Trust  Com- 
pany in  1914.  David  J.  Lord  was  the  Com- 
pany's President  until  1909;  since  then  George 
S.  Mumford  has  served  in  that  capacity. 


CHAPTER  XVIII 

the  trust  company  section  of  the  american 
bankers'  association 

Prior  to  the  year  1896  there  had  been  no 
distinctive  organization  of  trust  company  offi- 
cials. Many  of  the  companies  had,  indeed, 
been  members  of  the  American  Bankers'  Asso- 
ciation, some  of  them  almost  from  its  beginning 
in  1875,  ^^d  had  regularly  sent  representatives 
to  the  annual  conventions  of  that  body,  the 
proceedings  of  which,  always  interesting  to 
financial  minds,  bore  at  times  directly  on  trust 
company  affairs.  But  as  the  years  went  by, 
each  furnishing  evidence  of  the  great  and  ever 
broadening  scope  of  trust  company  interests, 
the  desirability  of  an  organization,  allied  with 
the  Association,  but  having  an  individual  entity 
and  recognized  aims,  was  increasingly  felt. 

The  first  step  toward  the  realization  of  this 

263 


264       Story  of  Trust  Companies 

project  was  taken  in  1895  when  the  Executive 
Council  of  the  American  Bankers'  Association 
was  requested  so  to  amend  its  by-laws  as  to 
permit  of  a  Trust  Company  Section  being 
formed;  the  application  was  refused  on  the 
ground  that  no  precedent  for  such  a  course 
existed.  The  next  year,  however,  early  in 
September,  a  letter  was  addressed  to  the  trust 
companies  calling  attention  to  the  want  of 
adequate  organization,  and  suggesting  that 
representatives  be  sent  to  discuss  the  matter 
at  the  convention  of  the  American  Bankers* 
Association  to  be  held  in  St.  Louis  on  Septem- 
ber 22d.  This  letter  was  sent  out  through  the 
Mississippi  Valley  Trust  Co.,  and  had  to  it 
appended  the  following  names: 

Boston— Old  Colony  Trust  Co.,  by  T. 
Jefferson  Coolidge,  Jr.,  President. 

New  York — Continental  Trust  Co.  of  the 
City  of  New  York,  by  Otto  T.  Bannard, 
President.  United  States  Mortgage  & 
Trust  Co.,  by  G.  W.  Young,  President. 

Brooklyn — Franklin  Trust  Co.,  by  Geo.  H. 
Southard,  President. 

Chicago — The     Northern     Trust     Co.    Bank, 


Founders  of  the  "Section"      265 

by  Arthur  Heurtley,  Secretary.  Security 
Title  &  Trust  Co.,  by  Peter  Dudley, 
Trust  Officer.  Title  Guarantee  &  Trust 
Co.,  by  Frank  H.  Sellers,  Trust  Officer. 

Indianapolis — The  Union  Trust  Co.,  by  John 
H.  Holiday,  President. 

St.  Louis — Mississippi  Valley  Trust  Co.,  by 
Breckinridge  Jones,  second  Vice-President. 
St.  Louis  Trust  Co.,  by  John  D.  Tilley, 
Secretary.  Union  Trust  Co.  of  St.  Louis, 
by  C.  Tompkins,  Treasurer.  Lincoln 
Trust  Co.,byA.A.  B.  Woerheide,  Secretary. 

Louisville — Columbia  Finance  &  Trust  Co., 
by  Attila  Cox,  President.  Fidelity  Trust 
&  Safety  Vault  Co.,  by  John  Stites,  Vice- 
President. 

Denver — The  International  Trust  Co.,  by 
F.  B.  Gibson,  Secretary. 

In  response,  seventeen  representatives  of 
trust  companies  were  present  at  the  convention 
which  was  held  at  the  Planters'  Hotel,  and  on 
the  evening  of  the  first  day  a  meeting  was  called 
with  Henry  M.  Dechert  presiding  and  Breck- 
inridge Jones  acting  as  secretary.  As  a  result 
of  the  deliberations  and  subsequent  action  of 
this  body  the  by-laws  of  the  American  Bankers' 


266      Story  of  Trust  Companies 

Association,  by  unanimous  vote  on  September 
24,  1896,  were  amended  to  include,  among 
others,  the  following  clauses: 

"A  section  of  the  Association  to  be  known 
as  'Section  of  Trust  Companies'  is  hereby 
established  which  shall  meet  annually  in 
connection  with  the  meeting  of  this  Associa- 
tion. 

"The  scope  of  the  section  shall  embrace 
matters  of  interest  to  trust  companies  in  so 
far  as  such  matters  are  distinct  from  bank- 
ing. It  may  report  to  the  Association,  and 
affairs  relating  to  trust  companies  may  be 
referred  to  it." 

Such  was  the  origin  of  the  Trust  Company 
Section  which,  in  its  growth  and  importance, 
has  amply  justified  the  foresight  and  initiative 
of  its  founders.  The  membership  in  1897, 
when  the  first  annual  meeting  was  held,  num- 
bered 114,  which  figure  had  grown  to  253  in 
1900,  and  has  been  constantly  increasing  until 
to-day  it  is  well  over  1400. 

The  annual  meeting  places  of  the  Section, 
with  the  names  of  the  Chairmen  (Presidents, 
since  1905),  are  here  given: 


Presidents  and  Meeting  Places  267 

1897.  Detroit,  Henry  M.  Dechert,  Common- 

wealth    Title     Insurance     &     Trust 
Company,  Philadelphia; 

1898.  Denver,  Francis  S.  Bangs,  State  Trust 

Company,  New  York  City; 

1899.  Cleveland,   Breckinridge  Jones,   Missis- 

sippi   Valley    Trust    Company,    St. 
Louis; 

1900.  Richmond,  Anton  G.  Hodenpyl,  Michi- 

gan Trust  Company,  Grand  Rapids; 

1 90 1.  Milwaukee,  Wm.  G.  Mather,  American 

Trust  Company,  Cleveland; 

1902.  New  Orleans,  John  Skelton  Williams, 

Richmond    Trust    &    Safe    Deposit 
Company ; 

1903.  San  Francisco,  John  E.  Borne,  Colonial 

Trust  Company,  New  York  City; 

1904.  New  York,  Breckinridge  Jones; 

1905.  Washington,  D.  C,  E.  A.  Potter,  Ameri- 

can Trust  &  Savings  Bank,  Chicago; 

1906.  St.    Louis,    Clark   WilHams,    Columbia 

Trust  Company,  New  York  City; 

1907.  Atlantic  City,  Festus  J.  Wade,  Mercan- 

tile Trust  Company,  St.  Louis; 

1908.  Denver,  Philip  S.  Babcock,  Trust  Com- 

pany of  America,  New  York  City ; 

1909.  Chicago,  A.  A.  Jackson,   Girard  Trust 

Company,  Philadelphia; 


268       Story  of  Trust  Companies 

1910.  Los  Angeles,  H.  P.  Mcintosh,  Guardian 

Trust  Company,  Cleveland; 

191 1.  New  Orleans,  Oliver  C.  Fuller,  Wiscon- 

sin    Trust     &     Security     Company, 
Milwaukee ; 

1912.  Detroit,    Col.    F.    H.    Fries,    Wachovia 

Loan   &  Trust   Company,   Winston- 
Salem,  N.  C. 

1913.  Boston,    William    C.    Poillon,    Bankers 

Trust  Company,  New  York  City; 

1914.  Richmond,  F.  H.  Goff,  Cleveland  Trust 

Company; 

19 1 5.  Seattle,    Ralph    W.    Cutler,    Hartford 

Trust  Company; 

1 91 6.  Kansas  City,  John  H.  Mason,  Commer- 

cial Trust  Company,  Philadelphia. 

In  the  years  1898,  1900,  1903,  and  1904,  in 
the  absence  of  the  regular  Chairmen,  and  in 
1907  of  the  President,  the  meetings  were  pre- 
sided over  by  Breckinridge  Jones,  William  G. 
Mather,  E.  A.  Potter,  Clark  Williams,  and 
Philip   S.  Babcock,  respectively. 

The  order  of  business  at  the  meetings,  after 
the  customary  preliminaries,  has  generally 
been  as  follows:  Address  of  Welcome;  Reply 
to  Address   of   Welcome;   Secretary's  Report; 


The  "Standard  Oil  Trust"      269 

Report  of  the  Executive  Committee;  Report 
of  Committee  on  Protective  Laws;  Reports  of 
Special  Committees;  Addresses;  Addresses  of 
Vice-Presidents  of  the  Section  from  the  various 
States;  Election  of  Officers;  Adjournment. 

In  retracing  the  story  of  the  Trust  Company- 
Section,  its  present  magnitude  and  its  progress 
duiing  twenty  years,  consideration  should  be 
given  to  the  conditions  which  antedated  its 
inception.  There  were  in  the  entire  country, 
according  to  the  report  of  the  National  Mone- 
tary Commission  in  1894,  only  228  institutions 
that,  having  regard  to  the  functions  they  per- 
formed, could  rightly  be  described  as  trust 
companies.  But  owing  to  the  looseness,  or  the 
absence,  of  laws  governing  such  activities  there 
were  many  concerns  which,  for  reasons  decidedly 
under  suspicion,  flaunted  the  word  "trust"  in 
their  titles,  and  found  a  fruitful  soil  for  their 
operations  in  the  general  misconception  of  what 
a  true  trust  company  should  be.  Nor  was  such 
ignorance  of  the  matter  confined  to  the  masses 
of  the  people.  Breckinridge  Jones,  the  reputed 
"father  "  of  the  Section,  has  amusingly  recounted 
his  experiences  when  he  attempted  to  discover 


270       Story  of  Trust  Companies 

and  collate  the  laws  of  the  various  States 
referring  to  trust  companies.  He  wrote  for 
information  to  the  proper  authorities  through- 
out the  country  and,  in  the  case  of  several 
States,  learned  that  there  was  nothing  in  the 
laws  bearing  on  the  subject.  The  state  officials 
in  other  instances  proved  by  their  responses, 
and  the  material  supplied,  that  their  notion 
of  a  trust  company  might  be  represented  fairly 
by  the  definition,  "a  combination  in  restraint 
of  trade";  while  one  Attorney  General,  on  its 
being  pointed  out  that  he  had  in  this  manner 
misunderstood  the  purport  of  the  query,  sought 
to  rectify  his  mistake  by  stating  that  the  only 
trust  company  of  which  his  department  had 
knowledge  was  the  Standard  Oil  Trust! 

Among  the  trust  companies  themselves  there 
had  been,  in  general,  scarcely  any  attempt  at 
cooperation,  and  little  uniformity  of  ideals  and 
practice.  The  promoters  of  the  Section,  aware 
of  the  need  of  thorough  and  constructive  propa- 
ganda, proceeded  to  "lay  the  foundation  for  a 
recognized  literature,  standardize  the  business, 
and  promote  acquaintance  and  social  inter- 
course  among    trust  company     men."     There 


Addresses  before  the  Section    271 

had  been,  previously,  almost  no  literature  on  the 
trust  company;  in  fact  it  has  been  stated  that 
all  the  printed  information  on  the  subject, 
scattered  and  inaccessible  as  it  was,  might  be 
contained  in  the  space  of  fifty  pages.  With 
the  publication  of  the  Proceedings  of  the  Trust 
Company  Section  for  the  inaugural  year  1897, 
a  beginning  was  made  on  what  has  become  an 
extensive  and  valuable  accumulation  of  special 
knowledge.  As  meeting  after  meeting  took 
place  addresses  were  delivered,  and  in  due 
course  published,  on  the  different  phases  of 
trust  company  work.  Prominent  trust  com- 
pany officials  stood  forth  ready  to  impart,  for 
the  benefit  of  the  cause,  the  information  and 
opinions  which  they  had  gained  by  interested 
study  and  long  experience.  In  these  endeavors 
they  were  ably  seconded  by  the  bankers  them- 
selves, who,  once  the  scope  of  the  Section  was 
defined,  saw  in  its  activities  only  the  promise 
of  a  friendly  rivalry,  mutually  beneficial,  be- 
tween their  institutions  and  the  trust  companies. 
Moreover,  in  addition  to  those  whose  efforts, 
however  praiseworthy,  might  be  ascribed  to 
naturally  interested  motives,  there  were  found 


272       Story  of  Trust  Companies 

prominent  men  in  other  walks  of  life,  Federal 
and  State  officers,  lawyers,  public  accountants, 
and  statisticians,  who,  seeing  in  the  work  of  the 
Section  the  hope  of  a  broader  and  more  orderly 
system  of  national  finance,  willingly  helped  to 
further  the  movement  by  preparing  and  de- 
livering appropriate  addresses  before  the  meet- 
ings. A  few  of  these  may  be  mentioned  as 
indicating  the  range  of  subjects  presented: 
1903,  address  on  "The  Problem  of  Wealth  and 
the  Trust  Company  as  Trustee,"  by  Hon. 
Lyman  J.  Gage,  ex-Secretary  of  the  Treasury; 

1906,  "Defalcations:  what  Can  be  Done  to 
Decrease  them,"  by  Hon.  Pierre  Jay,  then 
Bank  Commissioner  of  Massachusetts,  now 
Federal    Reserve   Agent   in    New   York   City; 

1907,  "Confusion  of  Meaning  of  Trust  Com- 
panies," by  Hon.  Charles  Emory  Smith,  former 
Postmaster  General  and  United  States  Ambas- 
sador; 1912,  "Some  Unscheduled  Liabilities  of 
Trust  Companies,"  by  Dean  Henry  M.  Bates, 
University  of  Michigan;  1913,  "The  Relation 
of  the  Government  to  the  Trust  Company,"  by 
Hon.  Samuel  W.  McCall,  Governor  of  Massa- 
chusetts;  1914,   "Future  of  State  Institutions 


Social  Side  273 

under  the  Federal  Reserve,"  by  H.  Parker 
Willis,  Secretary,  Federal  Reserve  Board. 

Those  responsible  for  the  progress  of  the 
Section  have  not,  however,  depended  alone  on 
the  educational  influence  of  the  meetings,  in- 
spiring and  far  reaching  though  it  has  been. 
From  time  to  time  there  has  been  published 
and  circulated  carefully  compiled  matter  of 
practical  value  to  trust  company  officers,  such 
as  the  Digest  of  Trust  Company  Laws  in  the 
States  and  Territories,  and  Forms  for  Trust 
Companies.  Many  folders  and  booklets,  con- 
taining brief  articles  on  trust  company  services, 
have  also  been  prepared  and  distributed  in 
large  quantities  for  general  information. 

In  assemblages  of  business  men,  however 
engrossing  the  occasion  that  has  brought  them 
together,  the  social  and  recreative  instincts 
are  usually,  as  a  matter  of  course,  taken  into 
account.  In  this  respect  the  Trust  Company 
Section,  so  far  as  the  annual  meetings  are  con- 
cerned, is  relieved  of  initiative  through  its 
affiliation  with  the  American  Bankers'  Associa- 
tion, whose    plans    for    social    enjoyment    are 

heartily    availed    of,    and    include    banquets, 
18 


274      Story  of  Trust  Companies 

receptions,  balls,  trips  to  interesting  points, 
etc.  Among  the  memorable  events  of  this 
nature  may  be  recalled  the  Grand  Ball  given 
at  the  Auditorium  in  Chicago  in  1909,  when 
President  Taft  and  General  Frederick  D.  Grant 
were  present.  Previously,  in  1904,  when  the 
convention  was  held  in  New  York,  the  local 
members  of  the  Section  provided  special  enter- 
tainment for  their  associates  in  the  form  of  a 
luncheon,  followed  by  a  trip  through  the  newly 
completed  subway. 

Reference  will  later  on  be  made  to  the  ban- 
quet given  in  191 1,  on  the  eve  of  the  admission 
of  trust  companies  to  full  membership  in  the 
New  York  Clearing  House.  The  occasion 
proved  so  interesting  and  instructive  that  there 
was  a  general  demand  for  its  repetition  in  the 
year  following,  and  the  next,  and  so  on  until 
it  has  become  an  established  event  among  trust 
company  men  throughout  the  country.  The 
arrangements  are  under  the  direction  of  the 
Trust  Com.pany  Section,  which,  however,  makes 
no  appropriation  of  funds  towards  the  ex- 
penses, these  being  met  by  the  subscriptions 
of  the  guests.     From  the  first  the  scene  of  the 


Secretarial  Duties  275 

banquets  has  been  the  famous  Waldorf-Astoria 
Hotel. 

The  Section  has  its  office  in  New  York  with 
the  American  Bankers'  Association,  which  occu- 
pies the  twelfth  floor  of  the  Hanover  Bank 
Building,  with  entrances  at  No.  11  Pine  and 
No.  5  Nassau  streets.  In  these  spacious  and 
refined  quarters  is  to  be  found  equipment  in 
keeping  with  the  importance  and  country-wide 
influence  of  the  Association.  The  library  is 
remarkably  rich  in  its  stores  of  financial  and 
commercial  Hterature. 

For  some  years  the  Secretary  of  the  American 
Bankers'  Association  acted  in  like  capacity  for 
the  Trust  Company  Section,  until  1908,  when 
Philip  S.  Babcock  was  elected  Secretary.  He 
had  formerly  been  Vice-President  of  the  Trust 
Company  of  America,  and  by  his  experience, 
courtesy,  and  tact  has  contributed  much  toward 
the  continuous  growth  of  the  Section.  Upon 
his  resignation,  in  September,  191 6,  Leroy  A. 
Mershon,  formerly  PubHcity  Manager  of  the 
United  States  Mortgage  &  Trust  Co.,  became 
Secretary. 


CHAPTER  XIX 


PERSONNEL 


What  has  been  narrated  in  the  preceding 
chapters  has  of  necessity  been  a  recounting 
of  events  and  developments  almost  entirely  de- 
void of  credit  for  the  achievements  of  individ- 
uals. Had  space  permitted,  the  stories  of  the 
separate  companies  would  have  had  woven  in 
with  them  a  record  of  the  names  and  something 
of  the  individual  deeds  of  the  host  of  men  in 
public,  professional,  and  business  life  through 
whose  efforts  each  of  these  corporate  successes 
have  been  accomplished. 

It  seems  fitting,  therefore,  to  include  a  roster 

of  trust  company  notables,  other  than  the  names 

of  the  presiding  officers  heretofore  mentioned. 

With  an  occasional  repetition  of  some  few  of  the 

latter,  and  of  the  names  of  some  of  the  very 

early  founders,  such  a  list  is  here  presented.     It 

276 


Men  in  Public  Life  2^^ 

is  not  offered  as  a  complete  collection  of  names, 
but  will  serve  to  illustrate  how  splendidly  the 
trust  companies  have  been  manned  and  built 
up  and  safeguarded  through  all  the  years.  The 
subjoined  names  are  those  of  some  persons  who 
either  as  incorporators  or  directors  of  institu- 
tions, years  ago  or  in  our  own  times,  have  lent 
their  time,  their  means,  and  their  reputations 
to  the  upbuilding  of  one  or  more  companies. 

First  we  have  the  Citizens  Savings  &  Trust 
Company  of  Cleveland,  presenting  the  distin- 
guished name  of  President  James  A.  Garfield. 
Of  Vice-Presidents  there  have  been  several 
trust  company  men,  namely,  Levi  P.  Morton, 
Adlai  E.  Stevenson,  and  James  S.  Sherman. 
Among  members  of  Cabinets  are  found :  WilHam 
M.  Evarts,  Richard  Olney,  John  Hay,  EHhu 
Root,  Robert  Bacon,  Philander  C.  Knox,  Daniel 
Manning,  Charles  S.  Fairchild,  John  G.  Car- 
lisle, Lyman  J.  Gage,  LesHe  M.  Shaw,  William 
G.  McAdoo,  Robert  T.  Lincoln,  Stephen  B. 
Elkins,  Daniel  S.  Lamont,  Russell  A.  Alger, 
Judson  Harmon,  John  W.  Griggs,  William  F. 
Vilas,  John  Wanamaker,  George  von  L.  Meyer, 
William   C.    Whitney,     Benjamin    F.     Tracy, 


278       Story  of  Trust  Companies 

John  D.  Long,  Paul  Morton,  Truman  H.  New- 
berry, David  R.  Francis,  and  Cornelius  N.  Bliss. 

The  country's  diplomatic  service  has  been 
represented  by  a  number  of  notables  who  at 
home  have  served  on  the  boards  of  trust  com- 
panies. Among  these  may  be  mentioned  White- 
law  Rcid,  William  Walter  Phelps,  Joseph  H. 
Choate,  Myron  T.  Herrick,  and  Henry  Morgen- 
thau.  Many  United  States  Senators'  names 
have  appeared  on  trust  company  directorates. 
A  few  names  by  way  of  example  of  this  are: 
Marcus  A.  Hanna,  Nelson  W.  Aldrich,  William 
A.  Clark,  John  Kean,  Clarence  W.  Watson, 
and  William  Murray  Crane.  Comptrollers 
of  the  Currency  have  frequently  served  on  trust 
company  boards.  Some  of  the  names  of  these 
in  recent  years  have  been  William  L.  Tren- 
holm,  James  H.  Eckels,  Charles  G.  Dawes,  Law- 
rence 0.  Murray,  and  John  Skelton  Williams. 
Occasionally  military  celebrities  have  lent 
their  names  to  trust  undertakings.  As  witness 
of  this  we  find  on  the  list :  Generals  Franz  Sigel, 
James  S.  Wadsworth,  Stewart  L.  Woodford, 
and  Wager  Swayne. 

An    extended    schedule    might    be   made   of 


Merchant  Directors  279 

trust  company  connections  on  the  part  of 
governors  of  various  States.  As  a  single  illus- 
tration of  this,  six  of  the  chief  executives  of  the 
Empire  State  are  found  to  have  had  trust  com- 
pany affiliations:  Edwin  D.  Morgan,  Samuel  J. 
Tilden,  Roswell  P.  Flower,  Horace  White, 
John  A.  DLx,  and  Martin  H.  Glynn.  The  same 
is  true  of  mayors,  and  the  list  for  New  York 
City  is  made  up  of  the  names  of  Edward  Cooper, 
William  R.  Grace,  Abram  S.  Hewitt,  Hugh 
J.  Grant,  William  L.  Strong,  and  WilHam  J. 
Gaynor.  Among  the  names  of  the  older  mer- 
chants of  New  York,  and  some  of  the  other 
large  cities,  such  well-known  persons  are  found 
to  have  had  a  place  in  various  of  the  directorates 
as:  John  Jacob  Astor,  Peter  Cooper,  Moses 
Taylor,  William  E.  Dodge,  Marshall  0.  Roberts, 
Eugene  Kelly,  Samuel  D.  Babcock,  Charles 
L.  Tiffany,  Robert  Hoe,  Charles  Scribner, 
William  Steinway,  WilHam  H.  Appleton,  Wil- 
liam H.  Aspinwall,  Jordan  L.  Mott,  Abiel  A. 
Low,  William  Turnbull,  Eugene  G.  Blackford, 
Charles  A.  Schieren,  William  H.  Macy,  Morris 
K.  Jesup,  John  S.  Kennedy,  Erastus  Corning, 
and  Marshall  Field. 


28o      Story  of  Trust  Companies 

A  casual  search  of  lists  of  directors  who  have 
been  prominent  in  the  industrial  affairs  of  later 
days  reveals  a  number  of  names  of  well-known 
men. 

Standard  Oil  interests  have  been  represented 
by  William  Rockefeller,  Henry  H.  Rogers, 
Henry  M.  Flagler,  Charles  M.  Pratt,  Edward 
T.  Bedford,  and  Orville  T.  Waring. 

Steel  and  allied  interests  comprise  names  like 
Henry  C.  Frick,  Henry  Phipps,  Charles  M. 
Schwab,  Elbert  H.  Gary,  Daniel  G.  Reid, 
Charles  A.  Deere,  Hugh  McMillan,  John  Ste- 
venson, Jr.,  Cyru§  H.  McCormick,  F.  N.  Hoff- 
stott,  and  Cleveland  H.  Dodge. 

Among  manufacturers  of  recent  and  current 
times  are  to  be  mentioned,  Henry  0.  Have- 
meyer,  Theodore  A.  Havemeyer,  Glaus  Spreck- 
els,  John  Arbuckle,  Frederick  G.  Bourne, 
William  Barbour,  Marcellus  Hartley,  Eberhard 
Faber,  Charles  C.  Coffin,  George  Crocker, 
George  Westinghouse,  Jr.,  Harrison  E.  Gawtry, 
George  Eastman,  James  B.  Duke,  Samuel  P. 
Colt,  Charles  H.  Nettleton,  Seth  E.  Thomas, 
Daniel  M.  Ferry,  William  Wrigley,  Jr.,  Fred- 
erick   E.    Weyerhauser,     Emerson    McMillin, 


Transportation  Heads  281 

Charles  W.  McCutchen,  William  Ziegler,  John 
D.  Larkin,  Adolphus  Busch,  John  F.  Betz, 
William  Disston,  Albert  A.  Pope,  Sidney  W. 
Winslow,  Edward  Mallinckrodt,  Joy  Morton, 
and  T.  Coleman  DuPont. 

In  mercantile  lines  during  recent  years  some 
names  are :  Alexander  E.  Orr,  Francis  H.  Leggett, 
Thomas  F.  Victor,  William  D.  Sloane,  William 
A.  Jamison,  Carl  Schefer,  Augustus  D.  JuilHard, 
Isidor  Straus,  Jesse  I.  Straus,  Louis  Stern, 
John  J.  Riker,  Isaac  H.  Clothier,  David  Dows, 
Jr.,  Frank  Tilford,  Stephen  Farrelly,  Robert 
Olyphant,  Frank  W.  Wool  worth,  Thomas  B. 
Wanamaker,  Edwin  J.  Berwind,  Patrick  Cud- 
ahy,  J.  Ogden  Armour,  Patrick  A.  Valentine, 
Levi  Z.  Leiter,  Alexander  H.  Revell,  A.  Mont- 
gomery Ward,  and  E.  C.  Simmons. 

A  search  of  trust  company  lists  shows  many 
notables  in  the  field  of  transportation  business. 
Some  of  these  are,  or  have  been :  Cornelius  Van- 
derbilt  (the  Commodore),  William  H.  Vander- 
bilt,  Daniel  Drew,  Robert  Garrett,  Austin 
Corbin,  George  M.  Pullman,  Samuel  Sloan, 
John  Taylor  Johnston,  Chauncey  M.  Depew, 
James  J.  Hill,  Loms  K.  Hill,  Stuyvesant  Fish, 


282       Story  of  Trust  Companies 

Collis  P.  Huntington,  Edward  H.  Harriman, 
George  J.  Gould,  Edwin  Hawley,  Robert 
Mather,  George  F.  Baer,  Alexander  J.  Cassatt, 
James  McCrea,  Samuel  Rea,  N.  Parker  Short- 
ridge,  Sir  William  C.  Van  Home,  Eben  B. 
Thomas,  Samuel  Spencer,  Leonor  F.  Loree, 
Arthur  E.  Stilwell,  Sir  Thomas  G.  Shaughnessy, 
Lucius  Tuttle,  Marvin  Hughitt,  Julius  Krutt- 
schnitt,  William  H.  Baldwin,  Jr.,  Charles  S. 
Mellen,  Howard  Elliott,  Anthony  N.  Brady, 
Theodore  P.  Shonts,  Russell  Robb,  William  B. 
Leeds,  Frank  Trumbull,  Edward  P.  Ripley,  Ben- 
jamin F.  Yoakum,  William  G.  Besler,  Henry 
Tatnall,  Frank  J.  Gould,  and  Samuel  Thomas. 

Cable,  telegraph,  and  telephone  business 
contributes  a  group  of  names,  such  as  Cyrus 
W.  Field,  Henry  L.  Hotchkiss,  Thomas  T. 
Eckert,  Robert  C.  Clowry,  Clarence  H.  Mackay, 
Theodore  N.  Vail,  and  Union  N.  Bethell. 

Among  life,  fire,  and  marine  insurance  com- 
pany heads  mention  is  to  be  made  of  Richard 
A.  McCurdy,  Charles  A.  Peabody,  Henry  B. 
Hyde,  James  H.  Hyde,  John  A.  McCall,  George 
E.  Ide,  Elbridge  G.  Snow,  John  F.  Dryden, 
Henry  Evans,  and  Anton  A.  Raven. 


Professional  Men  283 

The  bench  and  bar  have  contributed  these 
among  other  names:  Charies  P.  Daly,  Elbridge 
T.  Gerry,  Lispenard  Stewart,  Hugh  J.  Jewett, 
Charles  Francis  Adams,  2d,  Charlton  T.  Lewis, 
Lewis  Cass  Ledyard,  William  Bayard  Cutting, 
John  W.  SterHng,  Frederic  R.  Coudert,  Julien  T. 
Davies,  Joseph  S.  Auerbach,  Paul  D.  Cravath, 
Henry  W.  De  Forest,  DeLancey  NicoU,  Joseph 
Larocque,  B.  Aymar  Sands,  Frank  R.  Lawrence, 
George  B.  Case,  and  Frederick  Geller. 

Journalism  has  been  represented  by  names 
Hke  Salem  H.  Wales,  Oswald  G.  Villard,  Frank 
A.  Munsey,  George  Harvey,  and  William  J. 
Arkell;  mining  business  contributes  names  like 
Daniel  Guggenheim,  Isaac  Guggenheim,  and 
Adolph  Lewisohn;  among  hotel  managers  well- 
known  names  in  the  trust  company  field  have 
been  George  C.  Boldt  and  James  H.  Breslin; 
even  medicine  and  literature  are  dignified  by 
the  name  of  Dr.  S.  Weir  Mitchell;  and  the 
eminent  educator,  Harry  A.  Garfield,  has  in 
the  past  been  an  interested  participant  in  trust 
company  operations. 

But  beyond  all  these,  the  logical  and  essential 
class  of  men  of  whom  might  be  expected  ability 


284      Story  of  Trust  Companies 

and  discretion  as  honorary  officers  or  directors 
has  always  been  the  country's  private  and  cor- 
porate bankers.  Of  the  class  first  named, 
coming  from  early  days  down  to  the  present, 
mention  is  to  be  made  of  Russell  Sage,  Thomas 
Tileston,  Shepherd  Knapp,  George  vS.  Bow- 
doin,  A.  Gracie  King,  Edmund  D.  Randolph, 
Joseph  W.  Drexel,  J.  Picrpont  Morgan,  Sr., 
Charles  Steele,  Edward  T.  Stotesbury,  George 
W.  Perkins,  Henry  P.  Davison,  William  H. 
Porter,  August  Belmont,  Jacob  H.  Schiff,  Mor- 
timer L.  Schiff,  Otto  H.  Kahn,  Paul  M.  War- 
burg, Alexander  Brown,  John  Crosby  Brown, 
Charles  D.  Dickey,  Thomas  Maitland,  George 
Coppell,  James  Speyer,  Adrian  Iselin,  Jr.,  Isaac 
N.  Seligman,  Luther  Kountze,  Charles  Lanier, 
Ernst  Thalmann,  Henry  L.  Higginson,  Gardiner 
M.  Lane,  E.  Rollins  Morse,  George  C.  Clark, 
Jr.,  Robert  H.  McCurdy,  Arthur  Tumbull, 
Oscar  L.  Gubelman,  William  L.  Bull,  James 
Talcott,  Elverton  R.  Chapman,  Evans  R.  Dick, 
Henry  S.  Redmond,  Henry  Rogers  Winthrop, 
Grant  B.  Schley,  Allen  B.  Forbes,  Henry  R. 
Ickelheimer,  and  James  Imbrie. 

To  these  should  be  added  a  list  of  private 


Banker  Directors  285 

capitalists  such  as:  John  S.  Kennedy,  William 
Waldorf  Astor,  Vincent  Astor,  Darius  O.  Mills, 
Ogden  Mills,  W.  Emlen  Roosevelt,  Thomas  F. 
Ryan,  George  G.  Haven,  Robert  W.  Goelet, 
Cornelius  Vanderbilt  (the  younger),  Alfred  G. 
Vanderbilt,  Harry  Payne  Whitney,  Edwin 
Gould,  August  Heckscher,  Charies  R.  Flint, 
John  D.  Crimmins,  H.  Clay  Pierce,  Peter  A. 
B.  Widener,  Clement  A.  Griscom,  Thomas 
Dolan,  Morton  F.  Plant,  and  Norman  B.  Ream. 
To  enumerate  the  presidents  and  other  offi- 
cials of  national,  state,  and  savings  banks  who 
have  taken  part  in  trust  company  activities 
would  be  a  task  of  no  small  magnitude.  It 
will  be  fitting,  however,  to  show  a  few  repre- 
sentative names,  most  of  which  will  be  readily 
recognized  as  being  those  of  leaders  in  the  realm 
of  corporate  banking.  Without  repeating  the 
names  of  the  original  directors  of  the  Bankers 
Trust  Company,  all  of  which  were  set  forth 
in  an  earlier  chapter  of  this  volume,  a  partial 
list  of  New  York  bank  presidents  who  have 
served  on  trust  company  directorates  shows  the 
names  of  James  Stillman,  Frank  A.  Vanderlip, 
Valentine    P.    Snyder,    James    S.    Alexander, 


286       Story  of  Trust  Companies 

William  A.  Nash,  Walter  E.  Frew,  George  F. 
Baker,  Francis  L.  Hine,  Thomas  W.  Lamont, 
Henry  W.  Cannon,  Dumont  Clarke,  Lewis  L. 
Clarke,  Richard  Delafield,  George  G.  Williams, 
Joseph  B.  Martindale,  J.  Edward  Simmons, 
James  T.  Woodward,  Robert  M.  Galloway, 
Phineas  C.  Lounsbury,  Rollin  P.  Grant,  Joseph 
C.  Hendrix,  Edward  Townsend,  John  Harsen 
Rhoades,  and  Lewis  E.  Pierson. 

A  similar,  though  correspondingly  incomplete, 
list  for  Philadelphia  reveals  the  names  of  James 
R.  McAllister,  Philip  Doerr,  Samuel  S.  Sharp, 
Harry  B.  Michener,  C.  Stuart  Patterson,  Levi 
S.  Rue,  William  T.  Elliott,  Lewis  R.  Dick, 
James  F.  Sullivan,  J.  S.  McCulloch,  Edward  A. 
Schmidt,  and  G.  Colesberry  Purves. 

In  Chicago  we  find:  James  B.  Forgan,  David 
R.  Forgan,  George  M.  Reynolds,  John  C.  Black, 
Helge  A.  Haugan,  S.  R.  Flynn,  William  H. 
Brintnall,  Edwin  L.  Wagner,  Ernest  A.  Hamill, 
Leroy  A.  Goddard,  and  William  A.  Tilden. 

In  Boston  these  names,  among  others,  ap- 
pear: Robert  F.  Herrick,  Andrew  W.  Preston, 
George  W.  Moses,  Wilmot  R.  Evans,  C.  Minot 
Weld,  Henry  C.  Jackson,  Charles  O.  L.  Dillo- 


The  Modern  Tendency  287 

way,  William  A.   Gaston,   and  Eugene  V.  R. 
Thayer. 

All  over  the  United  States  the  tendency  in 
recent  years  has  been  for  bank  presidents  to 
affiliate  themselves  with  the  boards  of  directors 
of  the  trust  companies.  The  list  of  names 
which  points  this  fact  would  be  incomplete  with- 
out speaking  of  some  representative  bank 
executives  in  cities  other  than  those  already 
mentioned.  A  few  of  these  follow:  Michael 
F.  Docley,  of  Providence;  Robert  C.  Pmyn,  of 
Albany;  Robert  L.  Fryer,  of  Buffalo;  George 
T.  Smith,  of  Jersey  City;  Wilham  Scheerer,  of 
Newark;  Douglas  H.  Thomas,  of  Baltimore; 
Oliver  J,  Sands,  of  Richmond ;  Robert  J.  Lowry, 
of  Atlanta;  T.  H.  Given,  of  Pittsburgh;  Emory 
W.  Clark,  of  Detroit;  Fred  Vogel,  Jr.,  of  Alil- 
waukee;  F.  M.  Prince,  of  IMinneapolis,  Edwards 
Whitaker,  of  St.  Louis;  H.  J.  Alexander,  of 
Denver;  M.  F.  Backus,  of  Seattle;  D.  W.  Twohy, 
of  Spokane;  Wilham  M.  Ladd,  of  Portland,  Ore- 
gon; Frank  B.  Anderson,  of  San  Francisco;  and 
J.  M.  EUiott,  of  Los  Angeles. 


CHAPTER  XX  .. 

SUSPENSIONS  AND  FAILURES.       CLEARING  HOUSE 
ARRANGEMENTS.      RECENT   GROWTH 

Our  story  is  to  conclude  with  some  account 
of  the  numbers  and  aggregate  size  of  the  com- 
panies everywhere  during  recent  years.  Before 
presenting  these  facts,  however,  and  telHng 
of  the  modem  growth  and  general  success  of 
the  companies  as  a  class  of  institutions,  some- 
thing ought  properly  to  be  related  by  way  of 
showing  the  other  side  of  the  picture. 

In  1908,  a  compilation  was  made  by  "Brad- 
street's"  of  bank  and  trust  company  suspen- 
sions during  the  sixteen  years  from  1893  to 
1908,  inclusive.  This  showed  that  the  sus- 
pensions of  1893  numbered  598,  as  compared 
with  only  eighty-nine  in  the  panic  year  of  1907 
(mostly  from  October  on),  and  132  in  the  course 

of  the  year  1908. 

288 


Failures  289 

Listed  by  the  different  classes  of  institutions 
the  items  and  totals  for  the  sixteen  years  were: 

National  banks 359 

State  banks 559 

Savings  banks 167 

Private  bankers 686 

Loan  and  trust  companies 84 

A  total  of 1855 

On  the  face  of  this  statement,  it  would  ap- 
pear that  the  trust  companies  had  been  singu- 
larly free  from  insolvency  troubles.  But  it 
should  be  remembered  that  they  numbered 
considerably  fewer  than  the  banks  and  that 
whereas  the  savings  banks  which  had  suspended 
represented  93/iooths  per  cent,  of  all  the  insti- 
tutions of  that  class  throughout  the  country, 
the  element  of  trust  company  suspensions  re- 
presented 70/iooths  per  cent,  of  the  entire 
number,  while  the  percentages  of  the  state 
banks  and  national  banks  were  only  6i/iooths 
per  cent,  and  49/iooths  per  cent,  respectively. 

Early  in  191 1  a  particularly  disastrous  failure 

occurred  in  New  York  City.     This  was  when 

the    Carnegie    Trust    Company    at    No.    115 

Broadway  was   closed   by  order   of   the  State 

19 


290       Story  of  Trust  Companies 

Superintendent  of  Banks.  This  concern  had 
been  permitted  in  1907  to  bear  the  honored 
name  of  the  iron  master  of  Pittsburgh,  but  Mr. 
Carnegie  had  never  been  upon  the  directorate 
and,  when  troubles  overtook  the  Company,  was 
interested  only  to  the  extent  of  considering 
plans  whereby  those  difficulties  might  be 
averted.  Appeals  were  made  to  him  and  to 
others  at  the  close  of  1910,  but  internal  condi- 
tions were  too  insecure  and  the  institution, 
reported  in  the  summer  of  that  year  as  having 
over  eleven  and  one  half  millions  of  dollars  of 
resources,  went  to  the  wall  and  was  never 
rehabilitated. 

Another  suspension  in  New  York,  back  in 
1904,  was  that  of  the  Trust  Company  of  the 
Republic,  which  became  involved  in  difficulties 
connected  with  the  unfortunate  affairs  of  the 
"  Shipbuilding  Company."  A  serious  failure 
also  occurred  in  19 14  when  the  La  Salle  Street 
Trust  &  Savings  Bank  of  Chicago  was  forced 
to  suspend,  carrying  down  with  it  a  large  num- 
ber of  affiliated  banks.  The  so-called  Lorimer- 
Munday  difficulties  which  began  in  the  early 
spring  of  that  year  have  made  a  series  of  tangles 


The  Reserve  Question  291 

which  have  continued  to  engage  the  attention  of 
the  courts  even  down  to  the  time  of  this  writing. 

Previous  failures  had  taken  place  in  1903 
when  the  Federal  Trust  Company  of  Cleveland, 
a  concern  then  two  years  old,  got  into  difficulties; 
while  in  the  same  year  the  Union  Trust  Com- 
pany of  Boston  was  forced  to  suspend.  Gen- 
erally speaking,  however,  the  record  of  solvency 
among  these  institutions  has  been  as  satis- 
factory as  might  be  expected  in  a  field  in  which 
such  tremendous  strides  have  been  made  within 
a  short  period  of  time. 

The  greatest  trust  company  problem  of  the 
past  decade  has  certainly  been  the  question  of 
maintenance  by  them  of  proper  cash  reserves 
against  deposits.  Naturally  this  loomed  large 
in  the  affairs  of  New  York  City  financial  ar- 
rangements. Until  June  i,  1903,  trust  com- 
panies taking  advantage  of  the  privileges  of 
the  New  York  Clearing  House  had  not  been  re- 
quired to  carry  such  reserves  against  deposits. 
The  matter  was  first  made  a  sharp  issue  in 
April,  1902,  by  the  action  of  the  Clearing  House 
Association  in  adopting  a  regulation  to  the 
effect  that  trust  companies  affiHated  with  it 


292      Story  of  Trust  Companies 

should  be  called  upon  to  maintain  "such  cash 
reserves  on  deposits  as  the  Clearing  House 
Committee  may  determine." 

Much  discussion  in  financial  circles  followed, 
from  which  it  appeared  that  there  was  consider- 
able difference  of  opinion  among  the  institutions 
concerned,  some  of  them,  such  as  the  Title 
Guarantee  &  Trust  Company,  and  the  Van 
Norden  Trust  Company,  declaring  that  the 
proposed  regulation  was  just  and  necessary, 
and  announcing  that  they  had  provided,  of 
their  own  accord,  for  reserves  approximating 
or  equaling  the  fifteen  per  cent,  reserve  required 
of  state  banks.  A  few  of  the  largest  trust 
companies,  on  the  other  hand,  asserted  that 
the  action  of  the  Clearing  House  Association 
was  unnecessary  and  officious,  inasmuch  as  all 
conservative  and  successful  companies  did 
voluntarily  provide  their  own  reserves.  The 
majority  of  the  smaller  companies  appeared 
willing  to  abide  by  the  eventual  ruling  of  the 
Association;  but  on  one  point  practically  all 
the  trust  companies  were  agreed,  namely, 
that  there  should  be  a  distinction  made  between 
active  and  inactive  accounts,  that  is,  between 


Withdrawal  from  Clearing  House  293 

accounts  subject  to  check  at  sight  and  those 
designated  trust  funds  or  time  deposits.  It 
would  be  unwise  and  absurd,  they  argued,  to 
withdraw  from  circulation  so  great  an  amount 
of  money  as  would  be  represented  by  even  a 
moderate  reserve  on  funds  which,  of  their 
nature,  were  virtually  permanent  or  of  long  and 
fixed  duration.  It  was  contended  further  that  the 
banks  holding  trust  company  deposits  would  be 
the  real  sufferers  because  of  the  withdrawals 
necessary  to  meet  the  requirements  of  reserves. 

The  eagerly  anticipated  ruling  of  the  Clearing 
House  Association  was  announced  on  February 
II,  1903,  and  definitely  required  the  establish- 
ment and  maintenance  by  trust  companies  of 
a  5  per  cent,  cash  reserve  by  June  i,  1903,  of 
7>^  per  cent,  by  February  i,  1904,  and  of  10 
per  cent,  after  June  i,  1904.  It  became  ap- 
parent at  once  that  several  of  the  most  promi- 
nent trust  companies  would  withdraw  from  the 
Clearing  House,  and  for  a  time  there  seemed 
a  likelihood  that  an  independent  clearing 
organization  would  be  formed  for  the  transac- 
tion of  trust  company  business.  This  project, 
however,  was  finally  abandoned  as  impractica- 


294       Story  of  Trust  Companies 

ble,  and  upon  the  new  reserve  rule  going  into  effect 
on  June  i ,  1903,  it  was  found  that  seventeen  trust 
companies  continued  to  be  represented  at  the 
Clearing  House,  and  that  these  held  in  their 
vaults  as  a  5  per  cent,  cash  reserve,  $5,266,450, 
or  about  one  fourth  the  amount  which  would 
have  been  required  as  reserves  had  the  ten  seced- 
ing trust  companies  also  submitted  to  the  rule. 

On  February  i ,  1904,  the  date  on  which  the ']% 
per  cent,  reserve  requirement  became  effective, 
two  or  three  additional  companies  retired  rather 
than  carry  such  a  "burdensome  reserve,"  and  on 
June  I,  1904,  when  the  full  10  per  cent,  cash  re- 
serve was  required,  so  many  further  secessions 
had  occurred  that  there  remained  only  two  trust 
companies  of  the  twenty-seven  that  had  been 
originally  affiliated  with  the  Clearing  House. 

For  about  two  years  the  trust  companies 
were  allowed  to  shape  their  own  course,  but 
on  April  2'j ,  1906,  the  first  trust  company  reserve 
law  ever  enacted  in  New  York  went  into  effect. 
It  required  New  York  City  companies  to  carry 
5  per  cent,  of  deposits  in  cash,  5  per  cent,  in 
bank,  and  5  per  cent,  in  bonds,  and  appeared  to 
work  satisfactorily  until  the  panic  of  1907,  when 


The  Huf^hcs  Committee        295 


*& 


"over  the  counter"  clearings,  and  want  of  a 
clearing  organization,  resulted  in  serious  compli- 
cations. Early  in  1908  the  Legislature  enacted 
the  present  reserve  law  which  requires  trust  com- 
panies in  Manhattan  to  carry,  at  all  times,  a  cash 
reserve  of  15  per  cent,  of  all  demand  deposits. 

Back  in  1907  a  special  committee  of  bankers 
had  been  appointed  by  Governor  Hughes.  In  a 
report  submitted  by  them  in  December  of  that 
year,  it  was  stated  that  their  deliberations  had 
been  to  the  end  of  determining  "what,  if  any, 
changes  are  advisable  in  the  law  of  the  State 
relating  to  the  incorporation,  conduct,  and  super- 
vision of  banks  and  trust  companies."  The 
personnel  of  the  committee  was  partly  repre- 
sentative of  banks  and  partly  of  trust  compa- 
nies. Its  members  were  A.  Barton  Hepburn, 
Edwin  S.  Marston,  Edward  W.  Sheldon,  Alger- 
non S.  Frissell,  Stephen  Baker,  and  Andrew 
Mills.  Their  findings  were  not  at  all  harmoni- 
ous on  the  subject  of  what  reserves  ought  to 
be  maintained  by  the  trust  companies,  and  not 
until  191 1  were  there  signs  of  mutual  overtures 
between  these  institutions  and  the  management 
of  the  New  York  Clearing  House. 


296      Story  of  Trust  Companies 

On  May  6th  occurred  the  first  annual  dinner 
given  by  the  trust  companies.  This  took  place 
at  the  Waldorf-Astoria,  and  it  was  evident, 
from  the  interchange  of  opinions  between  the 
six  hundred  bankers  who  attended,  that  a  satis- 
factory settlement  might  be  looked  for.  Three 
days  later  the  Clearing  House  Committee  acted, 
and,  by  almost  unanimous  vote,  agreed  to  accept 
for  full  membership  any  trust  company  capital- 
ized at  $1,000,000  or  more,  on  condition  that 
it  carry  the  15  per  cent,  reserve  required  by 
law  and,  further,  that  it  maintain  10  per  cent, 
of  its  deposits  with  a  member  bank.  Of  a  total 
of  forty-three  trust  companies,  twenty-nine 
were  eligible  under  the  capitalization  require- 
ment and,  of  these,  eighteen  were  duly  admitted 
to  full  membership,  thus  happily  ending  a 
controversy  and  estrangement  which  for  nine 
years  had  been  marked  at  times  by  extreme 
bitterness  on  both  sides. 

On  June  30,  191 6,  the  total  deposits  of  the 
bank  and  trust  company  members  of  the  New 
York  Clearing  House  amounted  to  nearly 
three  and  one  half  billions  of  dollars.  The 
portion  of  this  representing  holdings  of  trust 


Recent  Progress  297 

company  members  was  approximately  one  and 
one  half  billions  of  dollars,  and  it  is  not  too 
much  to  claim  that  the  full  fellowship  estab- 
lished five  years  earlier  is  now  upon  a  footing 
of  permanency  and  mutual  advantage  which 
will  forever  do  away  with  the  jealousies  of  years 
gone  by. 

Everywhere  during  recent  years  there  has 
been  concentration  in  the  numbers  of  com- 
panies through  mergers  and  absorptions  equal 
almost  to  the  increase  in  new  organizations. 
For  example,  from  1903  to  19 16  the  number 
of  companies  in  Greater  New  York  has  shown 
a  net  decrease  from  forty-seven  to  twenty-nine. 
Except  for  the  two  important  suspensions  pre- 
viously commented  upon,  and  a  few  minor 
insolvencies,  all  of  this  contraction  has  been 
due  to  mergers,  the  greater  number  of  which 
have  been  alluded  to  in  the  separate  sketches 
of  the  New  York  companies. 

As  to  the  numbers  and  size  of  all  American 
companies,  statistics  since  1875,  when  Comp- 
troller Knox  reported  35  concerns  as  compiled 
by  him,  exclusive  of  eight  Chicago  companies, 
had  never  been  really  complete  until  the  advent 


298      Story  of  Trust  Companies 

in  1903  of  the  United  States  Mortgage  & 
Trust  Company's  annual  book,  Trust  Companies 
oj  the  United  States.  Previously,  in  1889,  the 
Comptroller's  report  mentioned  120  companies; 
in  1895  the  American  Bank  Reporter  showed 
that  there  were  569  with  total  resources  of  962 
milHons  of  dollars.  On  an  earlier  page  of  the 
present  volume  it  has  been  shown  that  the 
Ba?ikers  Encyclopedia  contained  only  509  trust 
companies  for  the  year  1896.  Summaries 
shown  in  the  United  States  Mortgage  & 
Trust  Company's  book  from  1903  to  1915, 
inclusive,  reveal  the  following  remarkable  totals : 


Year  ended 

Number 

Total  Resources  in 

June  30th 

Millions  of  Dollars 

1903 

912 

2910 

1904 

994 

3138 

1905 

1115 

3802 

1906 

1304 

3944 

1907 

1480 

4221 

1908 

1470 

3917 

1909 

1504 

4610 

1910 

1527 

4610 

1911 

1616 

5168 

1912 

1579 

5490 

1913 

1732 

5475 

1914 

1812 

5924 

1915 

1777 

6328 

'i^^^'^^mm"^ 


A  Modern  Building.     Home  of  America's  largest  trust  institution,  the 

Guaranty  Trust  Company  of  New  York.     Southeast  corner  of 

Broadway  and  Liberty  Street. 


A  1 91 6  Ag-gregate  299 

An  interesting  article  written  by  Clay  Her- 
rickin  the  Bankers  Magazine  in  191 1  shows  that 
on  June  30th  of  that  year  there  were  39  com- 
panies each  reporting  over  $25,000,000  of  re- 
sources and  that  there  were  no  less  than  165 
companies  each  of  which  had  over  $5,000,000 
of  the  same.  The  growth  of  five  years  past 
has,  however,  ecHpsed  over  and  again  all  pre- 
vious records.  In  the  tabulation,  which  now 
follows,  it  is  shown  that  as  of  June  30,  191 6, 
there  were  52  companies  having  over  $25,000,000 
of  resources  each,  and  that  these  with  the  18 
other  largest  companies  had,  in  the  summer  of 
1916,  a  grand  total  of  $4,309,756,442.80  of 
resources. 

Here  we  will  leave  these  and  the  host  of 
other  fiduciary  concerns  bearing  the  honored 
name  of  trust  company.  It  would  be  idle  to 
predict  the  possibiUties  of  continued  growth. . 
Whatever  this  may  show,  it  is  not  too  much  to 
claim  on  behalf  of  the  trust  companies  of  191 6 
that  generations  to  come,  looking  back,  will 
say  of  some,  if  not  all,  of  these  modem  money 
powers  that,  indeed,  "there  were  giants  in  the 
earth  in  those  days." 


300       Story  of  Trust  Companies 


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302       Story  of  Trust  Companies 


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APPENDIX  B 
BIBLIOGRAPHY 

BOOKS   AND   MANUALS 

Trust  Companies  of  the  United  States  [Statements, 
Officers,  Directors,  etc.,  1903  to  1916].  United 
States  Mortgage  &  Trust  Company,  New- 
York. 

The  Modern  Trust  Company.  New  York,  1906. 
F.  B.  KiRKBRiDE  and  J.  E.  Sterrett. 

The  Trust  Company  Idea  and  its  Development. 
Toronto,  1904.     Ernest  Heaton. 

Trust  Companies  in  the  United  States.  Baltimore, 
1902.     George  Cator. 

Trust  Companies,  their  Organization,  Growth,  and 
Management.  New  York,  1909.  Clay 
Herrick. 

History  of  Banking  in  the  United  States.  New  York, 
1896.     William  GRiVHAM  Sumner. 

Statutory  Revision  of  Laws  of  New  York  Affecting 
Banks,  Banking  and  Trust  Companies,  Enacted 
in  i8g2  and  Amended  i8pj  and  igoo.  Andrew 
Hamilton. 

Digest  of  Trust  Company  Laws  relating  to  Trust 

308 


Appendix  B  309 

Companies  of  the  United  States.     New  York, 

1905.     Benjamin  J.  Downer. 
Taxation  of  Trust  Companies.   Madison,  Wis.,  1906. 

Margaret  Anna  Schaffner. 
The  Investment  of  Trust  Funds.     San  Francisco, 

1909.     Frank  C.  AIortimer. 
Legal  Investments  for   Trust  Funds.     New  York, 

1914.     Frank  C.  McKinney. 
Forms  for  Trust  Companies,  Selected  and  A  rranged 

by  a  Committee  of  the  Trust  Company  Section. 

New  York,  1910. 
The  Rise  and  Business  of  the  Modern  Trust  Company. 

Philadelphia,  1905.     William  P.  Gest. 
The  Trust  Company  Day  by  Day.     Philadelphia, 

1911.    A.  A.  Jackson. 
The  Problem  of  Wealth  and  the  Trust  Company  as 

Trustee.     San    Francisco,    1903.      Lyman    J, 

Gage. 
The  Management  of  Trust  Property.     Boston,  1914. 

The  New  England  Trust  Company. 
Concerning   Wills.     St.   Louis.     Mercantile   Trust 

Company  of  St.  Louis. 
Statement  of  the  Growth  and  Present  Status  of  Trust 

Companies  in  the  United  States.     New  York, 

1905.     Edward  T.  Ferine. 
American  Trust  Companies,  their  Growth  and  Present 

Wealth.  New  York,  1909.   Edward  T.  Ferine. 

periodicals 

Trust  Companies,  Monthly  Magazine,  New  York, 
1904  to  1916. 


310      Story  of  Trust  Companies 

Bankers  Magazine,  New  York,  1846  to  1916. 

New    York   Evening   "Post'' — Saturday    Financial 

Supplements.     1903  to  1916. 
Banking  Law  Journal,  New  York. 
Commercial  ayid  Financial  Chronicle,  New  York. 
United  States  Investor,  New  York. 
The  Financier,  New  York. 
Review  of  Reviews,  New  York. 
The  Nation,  New  York. 
Rand-McNally  Bankers'  Monthly. 
Service,  St.  Louis,  Mississippi  Valley  Trust  Co. 
Guaranty  News,  Guaranty  Trust  Co.,  New  York. 

REPORTS   AND   BULLETINS 

American  Bankers  Association,  Trust  Company 
Section,  Proceedings  of  Anfiual  Meetings.  1895 
to  1916. 

American  Bankers  Association,  Library  Collection 
of  card  index  references  to  Trust  Company 
literature,  and  traveling  loan  collection  on 
Trust  Company  subjects  (available  only  to 
member  institutions). 

National  Monetary  Commission.  State  Banks  and 
Trust  Companies  since  the  Passage  of  the 
National  Bank  Act.  Washington  Government 
Printing  Office,  191 1.     George  E.  Barnett. 

Reports  of  Comptroller  of  the  Currency.  Washington 
1876  to  1916. 

New  York  State  Banks'  and  Trust  Companies*  Spe- 
cial Committee.  Report  submitted  to  Governor 
Hughes,  1907. 


Appendix  B  311 

Bulletins  of  the  American  Institute  of  Banking. 
Publications  of  the  American  Academy  of  Political 

and  Social  Science. 
Reports  of  Superintendents  of  Batiks,  various  States. 

MONOGRAPHS 

A  Sketch  of  the  Pennsylvania  Company  for  Insur- 
a7ices  on  Lives  and  Granting  Annuities.  Phila- 
delphia, 1896.     Harrison  S.  Morris. 

One  Hundredth  Anniversary  of  the  Pennsylvania 
Company  for  Insurances  on  Lives  and  Granting 
Annuities.     Philadelphia,  191 2. 

Historical  Sketch  of  the  Essex  Trust  Company,  Lynn, 
for  its  Centennial  Year.  1914.  Ellen  Mudge 
Burrill. 

Memorandum  of  Seventy-five  Years.  Girard  Trust 
Company.  Philadelphia,  1911.  Edward 
Sydenham  Page. 

The  Fiftieth  Anniversary  of  the  Founding  of  the 
United  States  Trust  Company  of  New   York. 

1903- 

Fifty    Years  of  Banking  in  Chicago.     Merchants* 

Loan    &    Trust    Company.      Chicago,    1907. 
William  Hudson  Harper  and  Charles  H. 
Ravell. 
Fifty  Years.    Philadelphia,  1865-1915.    The  Provi- 
dent  Life    &  Trust  Company.     William  S. 

ASHBROOK. 

Fidelity  Trust  Company.     Philadelphia,  1866-1916. 
Title  Insurance  and  Trust  Companies.    Philadelphia 
1889.     The  Land  Title  &  Trust  Co. 


312      Story  of  Trust  Companies 

Famous  Title  and  Trust  Companies.  Lawyers 
Title  Insurance  &  Trust  Company.    New  York, 

1909.       F.  B.  VOGEL. 

Citizens  Savings  &  Trust  Company.  Cleveland, 
1908. 

Old  Colony  Trust  Company.     Boston,  1915. 

State  Street  Events.  Twenty-fifth  Anniversary  of 
the  Founding  of  the  State  Street  Trust  Com- 
pany.    Boston,  1916. 

An  Epitome  of  the  Past,  A  Chronicle  of  the  Present, 
A  Promise  of  the  Future.  The  Cleveland  Trust 
Company.     Cleveland,  1908. 

Eighty-fifth  Anniversary.  Canal  Bank  &  Trust 
Company.     New  Orleans,  1916. 

Souvenir  of  Twenty-fifth  Anniversary.  The  Me- 
chanics Trust  Company  of  New  Jersey. 
Bayonne,  191 1. 


INDEX 


Abbott,  Gordon,  191 
Adams,  Charles  Francis,  2d, 

283 
Alabama    Life    Insurance   & 

Trust  Co.,  71 
Albany  Trust  Co.,  168 
Aldrich,  Nelson  W.,  278 
Alexander,  H.  J.,  287 

—  James  S.,  285 
Alger,  Russell  A.,  277 
Allen,  Stephen,  no 
Alley,  Saul,  21 

American    Bankers    Associa- 
tion, 227,  263,  264,  266 

—  Bible  Society,  The,  92,  94; 

United  States  Trust  Co. 
Appointed  Trustee,  92 

—  Life    Insurance    &    Trust 

Co.,  Baltimore,  29,  71 

—  Trust    &    Savings    Bank, 

Chicago,  188,  267 

—  Trust    Co.,    Boston,    259, 

260,  306 

—  Trust  Co.,  Cleveland,  267 
Anderson,  Frank  B.,  287 
Andrus,  George,  16 
Aonual  Reports  by  Referees 

of  the   Supreme   Court, 

86-88 
Appleton,  William  H.,  279 
Arbuckle,  John,  280 
Arkell,  WilHam  J.,  283 
Armour,  George,  105 

—  J.  Ogden,  281 
Ashbrook,  William  S.,  311 


Aspinwall,   William   H.,   279 
Assets,  Auction  Sale  of,  89 
Astley,  Thomas,  49 
Astor,  John  Jacob,  21,   112, 
279 

—  Trust  Co.,  New  York,  239, 

240,  304 

—  Vincent,  285 

—  WilUam  Waldorf,  285 
Atlantic   Cable,  Opening  of, 

106 

—  Trust  Co.,  167 
Auerbach,  Joseph  S.,  283 
Avery,  M.  N.,  245 

B 

Babcock,  Philip  S.,  267,  275 

—  Samuel  D.,  279 
Backus,  M.  F.,  287 
Bacon,  Robert,  277 
Baer,  George  F.,  282 
Bailey,  Benjamin,  16 
Baker,  Ezra  H.,  259 

—  George  F.,  180,  197,  286 
— •  Stephen,  223,  295 
Baldwin,  LeRoy  W.,  220 

—  William  H.,  Jr.,  282 
Baltimore  Fire  of  1904,  228, 

229 
Bancker,  Charles  N.,  8 
Bangs,  Francis  S.,  267 
Bank  for  Savings,  19 
" —  Note  Reporters,"  102 

—  of  Commerce,  74 

—  of  New  York,  29,  65 

—  of  North  America,  i 


313 


314 


Index 


Bank  of  the  State,  The,  Ohio, 

75 

—  of  the  United  States,  66 
Bankers  Trust  Co.,  io8,  222, 

227,  228,  268,  300 
Banking    Convention,    First 

Important,  64 
Banking  System,  Free,  66-68 
Banks,  early  criticism  of,  34- 

36 

—  Safety  Fund,  66 

—  Statistics  of,  53-56 
Bannard,  Otto  T.,   183,  184, 

264 
Barbour,  WilUam,  280 
Bard,  WiUiam,  21,  31,  1 10 
Barnes,  George,  255 
Barnett,  George  E.,  310 
Barry,  WiUiam  C,  254 
Bates,  Dean  Henry  M.,  272 
Bay  State  Trust  Co.,  Boston, 

301 
Bayne,  Samuel  G.,  223 
Bedford,  Edward  T.,  280 
Belmont,  August,  197,  284 
Bergen   &    Lafayette    Trust 

Co.,  Jersey  City,  256, 306 
Berwind,  Edwin  J.,  281 
Bcsler,  Williain  G.,  282 
Bethell,  Union  N.,  282 
Betz,  John  F.,  281 
Biddle,  Nicholas,  61 
Binney,  Horace,  48 
Black,  John  C,  286 
Blackford,  Eugene  G.,  279 
BHss,  ComeHus  N.,  278 
Bloodgood,  Abraham,  21 
Bohlen,  John,  7 
Boisot,  Emile  K.,  221 
Boldt,  George  C,  283 
Bond  Companies,  Early,  43 

—  Edward  P.,  148 
Boody,  Charles  A.,  258 
Booth,  Willis,  187 
Borne,  John  E.,  267 
Borough  Bank  of  Brooklyn, 

234 


Boston  Safe  Deposit  &  Trust 

Co.,  148-150,  306 
Bourne,  Frederick  G.,  280 
Bowdoin,  George  S.,  284 
Bowling    Green    Trust    Co., 

New  York,  217,  301 
Bownc,  Walter,  21 
Bradley,  Robert  S.,  238 
Brady,  Anthony  N.,  282 
Breslin,  James  H.,  283 
Bright,  Louis  V.,  177 
Brintnall,  William  II.,  286 
Broadway    Trust    Co.,    New 

York,  257,  305 
Bronson,  Isaac,  21 
Brooklyn  Bank,  234 

—  Trust  Co.,  133,  134,  257, 

303 
Brown,  Alexander,  284 

—  Cyrus  P.,  179 

—  H.  Martin,  179 

—  John  Crosby,  284 
Browne,  N.  B.,  131 
Buckner,  Alortimer  N.,  184 
Buffalo  Trust  Co.,  The,  75,  91 
Bull,  WiUiam  L.,  284 
Burke,  W.  P.,  210 

BurriU,  Ellen  Mudge,  311 
Busch,  Adolphus,  281 
Butler,  Benjamin  F.,  22 


Caldwell,  Stephen  A.,  131 
California    vSafe    Deposit    & 

Trust  Co.,  230 
Cambreleng,  C.  C.,  16 
Campbell,  Felix,  258 
Campbell,  James,  212 
Canal    Bank    &    Trust    Co., 

208-210,  247,  307,  312 
Cannon,  Henry  W.,  286 
—  James  G.,  223 
Carlisle,  John  G.,  277 
Carnegie    Trust    Co.,     New 

York,  289,  290 
Carteret  Trust  Co.,  256 


Index 


315 


Case,  George  B.,  283 
Cassatt,  Alexaiider  J.,  282 
Castles,  John  W.,   123,   196, 

236,  247 
Cator,  George,  308 
Centennial  Exposition,  114 
Central    Bank    of   Hatch   & 

Langdon,  100 

—  Trust  Co.  of  Illinois,  Chi- 

cago, 220,  221,  302 

—  Trust    Co.,     New    York, 

108,  150-152,  301 
Champlin,  John  T.,  16 
Chapman,  Elverton  R.,  284 
Charleston  Insurance  &  Trust 

Co.,  70 
Chemical  Bank,  29 
Chicago    Fire   of   1871,   104, 

145,  228 

—  Title    &   Trust   Co.,    249, 

307 
Choate,  Joseph  H.,  278 
Christensen,  General  C.  T., 

133 

Citizens  Bank   (Smead,  Col- 
lard  &  Hughes),  loi 

—  Savings     &     Trust     Co., 

Cleveland,  I39-I43.  277, 
302,  312 
City  Bank,  New  York,  23,  27 

—  Trust  &  Banking  Co.,  New 

York,  70 

—  Trust  Co.,  Boston,  301 

—  Trust  Co.,  New  York,  217 
Claflin,  John,  281 

Clark,  Clarence  H.,  131 

—  Emery  W.,  287 

—  George  C,  Jr.,  284 

—  William  A.,  278 
Clarke,  Dumont,  286 

—  Lewis  L.,  286 
Claxton,  John,  7 

Clearing  House,  New  York, 
82,  227,  236 

—  Admission  of  Trust  Com- 

panies to  Full  Member- 
ship, 274,  296 


—  Certificates,    Issuance   of, 

233 

—  Forming  of,  82 

—  1 91 6    Holdings    of    Trust 

Company  Members,  296, 
297 

—  Withdrawal  of  Trust  Com- 

panies from,  293 
Cleveland    Trust    Co.,    205- 

208,  268,  303,  312 
Clothier,  Isaac  H.,  281 
Clowry,  Robert  C,  282 
Coffin,  Charles  C,  280 
Coggeshall,  Edwin  W.,  177 
Colonial    Trust    &     Savings 

Bank,  Chicago,  302 

—  Trust  Co.,  New  York,  217, 

219,  267 

—  Trust  Co.,  Pittsburgh,  252 

307 
Colt,  Samuel  P.,  179,  280 
Columbia   Finance  &  Trust 

Co.,  Louisville,  265 
Columbia    Trust    Co.,    New 

York,  238,  239,  267,  301 
Commerce  Trust  Co.,  Kansas 

City,  246,  247,  306 
Commercial     Trust     Co.    of 

New  Jersey,  Jersey  City, 

213,  214,  305 

—  Trust    Co.,    Philadelphia, 

253,  268,  305 
Committee  of  Public  Safety, 

113 

Commonwealth  Trust  Co., 
Boston,  261,  306 

Continental  &  Commercial 
Trust  &  Savings  Bank, 
Chicago,  188,  189,  303 

—  Trust      Co.,      Baltimore, 

228 

—  Trust  Co.,  New  York,  183, 

264 
Converse,  Edmund  C,  223, 

225,  240 
Coolidge,    T.    Jefferson,    Jr., 

189-191,  264 


3i6 


Index 


Cooper,  Edward,  279 

—  Peter,  83,  279 
Coppell,  George,  284 
Corbin,  Austin,  281 
Cornell,  Robert  C,  109 
Corning,  Erastus,  83,  279 
Coudert,  Frederic  R.,  283 
Cowles,  J.  G.  W.,  206 
Cox,  Attila,  265 

Crane,  William  Murray,  278 
Cravath,  Paul  D.,  283 
Crimmins,  John  D.,  285 
Crocker,  George,  280 
Cudahy,  Patrick,  281 
Culbertson,  Townlcy,  246 
Cumming,  George  AL,  202 
Cutler,  Ralph  W.,  268 
Cutting,  William  IBayard,  283 
Cuyler,  Cornelius  C,  202 

—  Thomas  De  Witt,  253 

D 

Daly,  Charles  P.,  283 
Davies,  Julicn  T.,  283 
Davison,  Henry  P.,  223,  284 
Dawes,  Charles  G.,  220,  278 
Dechert,  Henry  M.,  265,  267 
Deere,  Charles  A.,  280 
De  Forest,  Henry  W.,  283 
Delafield,  Richard,  286 
Delavan,  Edward  C,  22 
Depew,  Chauncey  M.,  281 
Deposits  of  Bank  and  Trust 
Company    Members    of 
New       York      Clearing 
House,  296,  297 
Dick,  Evans  R.,  284 

—  Lewis  R.,  286 
Dickey,  Charles  D.,  284 
Digest     of     Trust     Company 

Laws  in  the  Stales  and 
Territories,  273,  308 

Dilloway,  Chas.  O.  L.,  286 

Disston,  William,  281 

Dix,  John  A.,  168,  279 

Doane,  J.  W.,  105 


Dod,  S.  Bayard,  256 
Dodge,  Cleveland  H.,  280 

—  William  E.,  279 
Doerr,  Philip,  286 
Dolan,  Thomas,  285 
Donnell,  James  J.,  251 
Dooley,  Michael  F.,  287 
Downer,  Benjamin  J.,  309 
Dows,  David,  123,  202 

—  David,  Jr.,  281 
Drake,  J.  C,  245 
Drew,  Daniel,  109,  281 
Drexel,  Joseph  W.,  284 
Drum,  John  S.,  244 
Dryden,  John  F.,  282 
Du  Bois,  W.  L.,  144 
Dudley,  Peter,  265 
Duer,  John,  21 
Duke,  James  B.,  280 
Dunham,  J.  H.,  105 

Du  Pont,  T.  Coleman,  281 
Dutilh,  Charles,  112 
D'Wolf,  James,  Jr.,  16 

E 

Eastman,  George,  280 
Eckels,  James  H.,  223,  278 
Eckert,  Thomas  T.,  282 
Elkins,  Stephen  B.,  277 
Elliott,  Howard,  282 

—  J.  M.,  287 

—  Wm.  T.,  286 
Ellis,  Rudulph,  131 
Empire  Trust  Co.,  New  York, 

219,  220,  303 
Endicott,  Wm.,  Jr.,  143 
Equitable    Trust    Co.,    New 

York,  217-219,  301 
Erie  Canal  Trust  &  Banking 

Co.  of  Buffalo,  The,  69 
Erringcr,  J.  Livingston,   144 
Essex     County     Trust     Co., 

East  Orange,  178,  304 
Evans,  Cadwalladcr,  7 

—  Hcnrv,  282 

—  Wilmot  R.,  286 


Index 


317 


Evarts,  Wm.  M.,  277 
Events,  Early,  18-20,  32,  33 


Faber,  Eberhard,  280 

Failures,  237 

Fairchild,  Charles  S.,  183,  277 

—  Julian  D.,  258 

Fairfield  Loan  &  Trust  Co. 
of  Connecticut,  61 

Farmers  Fire  Insurance  & 
Loan  Co.  (sec  below) 

Farmers'  Loan  &  Trust  Co., 
The,  New  York,  11-17, 
19-21,  29,  32,  36-47,  58, 
71,  75,  91,  107-110,  121, 
301 

Farmers  Trust  Co.  of  Lan- 
caster, Pa.,  2 

Farnam,  Henry,  105 

Farrelly,  Stephen,  281 

Federal  Reserve  Bank,  212, 
225,  260 

Federal  Trust  Co.,  Cleveland, 
250,  291 

Ferry,  Daniel  M.,  280 

Fessenden,  Russell  G.,  259 

Fidelity  Title  &  Trust  Co., 
Pittsburgh,  251,  252,  305 

—  Trust  &  Safety  Vault  Co., 

Louisville,  265 

—  Trust  Co.,  Newark,  304 

—  Trust    Co.,    Philadelphia, 

128-132,    177-179.    303, 

311 

Field,  Cyrus  W.,  282 

—  Marshall,  105,  279 

Fifth  Avenue  Trust  Co., 
New  York,  197,  300 

Fillmore,  Millard,  67 

First  National  Bank,  Brook- 
lyn, 233 

—  Trust    &    Savings    Bank, 

Chicago,  221,  222,  301 
Fish,  Preserved,  65 


Fish,  StuyA^esant,  281 
Fitzgerald,  Louis,  226 
Flagler,  Henry  M.,  280 
Flint,  Charles  R.,  285 
Flower,  Roswell  P.,  279 
Flynn,  S.  R.,  286 
Forbes,  Allan,  261 

—  Allen  B.,  284 
Forgan,  David  R.,  286 

—  James  B.,  221,  286 
Francis,  David  R.,  278 
Franklin,  Thomas,  16 

—  Trust  Co.,  Brooklyn,  180- 

182,  264,  305 
Free  Banking  Act,  68,  69,  73 
" —  Money  Banks,"  70 
Frew,  Walter  E.,  286 
Frick,  Henry  C,  185,  280 
Fries,  Col.  F.  H.,  268 
Frissell,  Algernon  S.,  295 
Frothingham,  L  H.,  122 

—  Thomas,  253 
Fryer,  Robert  L.,  287 
Fuller,  Melville  W.,  106 

—  Oliver  C,  268 


Gage,   Lyman  J.,    117,  272, 

277,  309 
Gallatin,  Albert,  65 
Gallaway,  Robert  M.,  286 
Gannon,  John  J.,  247 
Garfield,  Harry  A.,  283 

—  James  A.,  140,  277 
Garrett,  John  B.,  115 

—  Robert,  281 

Garth,  Granville  W.,  223 
Gary,  Elbert  H.,  280 
Gaston,  William  A.,  287 
Gates,  Thos.  S.,  144 
Gawtry,  Harrison  E.,  280 
Gaynor,  William  J.,  259,  279 
Geller,  Frederick,  283 
Georgia  Insurance  and  Trust 
Co.,  71 


3i8 


Index 


German-American  Trust  & 
Savings  Bank,  Los  An- 
geles, 245,  246,  305 

Gerry,  Elbridge  T.,  180,  283 

Gest,  Jolin  B.,  131 

—  William  P.,  131,  309 

Gibson,  F.  B.,  265 

Gill,  John,  of  R.,  252 

Girard  Trust  Co.,  Philadel- 
phia, 50-52,  76,  107, 
113-115,  267,  302 

Given,  T.  H.,  287 
Glynn,  Martin  H.,  279 
Goddard,  Leroy  A.,  286 
Goelet,  Robert,  123 

—  Robert  W.,  285 

Goff,  Frederick  H.,  206,  268 
Goodhue,  Jonathan,  2i 
Gould,  Edwin,  285 

—  Frank  J.,  282 

—  George  J.,  282 
Grace,  William  R.,  279 
Grant,  Frederick  D.,  274 

—  Hugh  J.,  279 

—  RoUin  P.,  286 
Gratz,  Hyman,  49 
Gray,  Cyrus  S.,  251 
Griggs,  John  W.,  277 
Griscom,  Clement  A.,  285 
Griswold,  George,  16 
Guaranty    Trust    Co.,    New 

York,  108,  195-200,  202, 
247.  300,  310 
Guardian    Savings    &    Trust 
Co.,  Cleveland,  250,  251, 
268,  304 

—  Trust    Co.,     New    York, 

220,  303 
Gubelman,  Oscar  L.,  284 
Guggenheim,  Daniel,  283 

—  Isaac,  283 

H 

Hamill,  Ernest  A.,  286 
Hamilton,  Andrew,  308 


Hamilton  Trust  Co.,  Boston, 

262 
Hanna,  Marcus  A.,  278 
Hardenbergh,  John  W.,  213 
Harison,  Richard,  16 
Harmon,  Judson,  277 
Harper,  William  Hudson,  311 
Harriman,  Edward  H.,  282 
Harris,  Albert  W.,  248 

—  Edward,  254 

—  Norman  W.,  248 

—  Trust    &    Savings    Bank, 

Chicago,  248,  249,  304 
Hart,  Francis  R.,  191 
Hartford  Trust  Co.,  268 
Hartley,  Marcellus,  280 
Harvey,  George,  283 
Haugan,  Hclge  A.,  286 
Havemeyer,  Henry  O.,  280 

—  Theodore  A.,  280 
Haven,  George  G.,  2^5 
Hawlcy,  Edwin,  282 
Hay,  John,  140,  277 
Heaton,  Ernest,  308 
Heckscher,  August,  285 
Heebner,  Samuel  L.,  144 
Hellman,  Isaias  W.,  204 

—  I.  W.,  Jr.,  204 

—  M.  S.,  186 

Hemphill,  Alexander  J.,  196 

—  James,  8 

Henderson,  Charles  R..  202 
Hendricks,  Francis,  255 
Hendrix,  Joseph  C,  286 
Hepburn,  A.  Barton,  223,  295 
Heppenhcimer,  General  Wil- 
liam C,  256 

Herrick,  Clay,  215,  299,  308 

—  Myron  T.,  278 

—  Robert  F.,  286 
Heurtley,  Arthur,  265 
Hewitt,  Abram  S.,  279 
Heyer,  Cornelius,  65 
Hibernia  Bank  &  Trust  Co., 

New  Orleans,  247,  306 
Hibernian   Banking   Associa- 
tion, Chicago,  249,  250 


Index 


319 


Higginson,  Henry  L.,  284 
Hill,  James  J.,  281 

—  Louis  K.,  281 
Hillhouse,  Thomas,  166,  168 
Hine,  Francis  L.,  286 
Hinman,  G.  P.,  86 
Hodenpyl,  Anton  G.,  267 
Hoe,  Robert,  279 
Hoffstott,  P.  N.,  280 
Holiday,  John  H.,  265 
Holland  Purchase,  12 
Hone,  Philip,  21 

Hooper,  James  R.,  143 

—  Wm.,  loi 

Hotchkiss,  Henry  L.,  282 
Howard    Trust    &    Banking 

Co.,  Troy,  70 
Hudson  Trust  Co.,  Hoboken, 

256,  306 
Hughes,  Charles  E.,  310 

—  Committee,  295 
Hughitt,  Marvin,  282 
Hulbert,  Edmund  D.,  105 
Hunt,  Wilson  G.,  83 
Huntington,  CoUis  P.,  282 
Hyde,  Henry  B.,  282 

—  James  H.,  282 


Ickelheimer,  Henry  R.,  284 

Ide,  George  E.,  282 

Illinois  Trust  &  Savings 
Bank,  Chicago,  145,  146, 
301 

Imbrie,  James,  284 

Industrial  Trust  Co.,  Provi- 
dence, 179,  180,  302 

International  Trust  Co.,  Den- 
ver, 265 

—  Trust    Co.,     New    York, 

234 
Irby,  W.  R.,  210 
IseHn,  Adrian,  Jr.,  284 
Ives,  General  Brayton,  168 


Jackson,  A.  A.,  267,  309 

—  Henry  C,  286 

—  John  B.,  251 
James,  William,  16,  21 
Jamison,  William  A.,  281 
Janney,  Nathaniel  E.,  176 
Jay,  Peter  Augustus,  21 

—  Pierre,  272 
Jennings,  E.  H.,  252 
Jersey  City  Trust  Co.,  305 
Jesup,  Morris  K.,  279 
Jewett,  Hugh  J.,  283 
Johnson,  Edward,  258 

—  Francis  M.,  149 
Johnston,  John  16 

—  John  Taylor,  281 

Jones,  Breckinridge,  193,  265, 
267,  269 

—  Edward  R.,  21 
Jordan,  Noah  W.,  259 
Juilliard,  Augustus  D.,  281 

K 

Kahn,  Otto  H.,  284 
Kean,  John»  278 
Keep,  Charles  H.,  238 
Kelly,  Eugene,  279 
Kelsey,  Clarence  H.,  169 
Kemper,  W.  T.,  246 
Kennedy,  John  S.,  152,  279, 

285 
Kent,  James,  21 
Kerr,  Walter,  iii 
King,  A.  Gracie,  284 

—  Edward,  123,  235 

—  John,  182 

—  Willard  v.,  238 

Kings  County  Trust  Co., 
Brooklyn,  258,  259,  305 

Kinney,  Thomas  T.,  178 

Kirkbride,  F.  B.,  308 

Knapp,  Shepherd,  83,  109, 284 

Knickerbocker  Savings  Insti- 
tution, 84 


320 


Index 


Knickerbocker    Trust    Com- 
pany,   New   York,    231, 

237,  238,  301 
Knowcr,  Benjamin,  22 
Knox,  John  J.,  53,  79,  161, 297 
—  Philander  C,  185,  277 
Kountze,  Luther,  284 
Krech,  Alvin  W.,  218 
Kruttschnitt,  Julius,  282 


Ladd,  William  M.,  287 
Lament,  Daniel  S.,  277 

—  Thomas  W.,  286 

Land  Title  &  Trust  Co., 
Philadelphia,  172,  174- 
176,  306,  311 

Landon,  Charles  G.,  202 

Lane,  Gardiner  M.,  284 

Lanier,  Charles,  284 

Larkin,  John  D.,  281 

Larocque,  Joseph,  283 

La  Salle  Street  Trust  &  Sav- 
ings Bank,  Chicago,  290 

Lawrence,  A.  H.,  16 

—  Amos  A.,  143 

—  Frank  R.,  283 

—  Joseph,  83,  86 

—  William  B.,  21 
Lawyers  Title  &  Trust  Co., 

New  York,  176,  177,  304 
Leavitt,  David,  76 
Ledyard,  Lewis  Cass,  283 
Leeds,  William  B.,  282 
Leggett,  Francis  H.,  281 
Leiter,  Levi  Z.,  281 
Lenox,  Robert,  21 
Lewis,  Charlton  T.,  283 

—  Gabriel  L.,  16 
Lewisohn,  Adolph,  283 

Life  Policy,  Old  "Farmers," 

46,  47 
Lincoln,  Robert  T.,  277 
Lincoln  Trust  Co.,  New  York, 

232 

—  Trust  Co.,  St.  Louis,  265 


Lloyd,  Horatio  G.,  253 
Loasby,  Arthur  W.,  255 
Lockport  Bank  &  Trust  Co., 

69,  70 
Logan,  William,  223 
Long,  John  D.,  278 
Long   Island   Loan  &   Trust 

Co.,  Brooklyn,  303 
Longstreth,  Joshua,  7 
Longyear,  W.  D.,  186 
Lord,  David  J.,  262 
Loree,  Leonor  F.,  282 
Lorillard,  Peter,  21 
Los  Angeles  Trust  &  Savings 

Bank,  244,  245,  305 
Lounsbury,  Phineas  C,  286 
Low,  Abiel  A.,  123,  180,  279, 

202 
Lowry,  Robert  J.,  287 
Ludlow,  Thomas  W.,  21 
Luhnow,  Christian  A.,  216 

M 

McAdoo,  William  G.,  277 
McAllister,  Jas.  R.,  286 
McBride,  James,  16 
McCall,  John  A.,  282 

—  Samuel  W,,  272 
McCarter,  Uzal  H.,  178 
McCormick,  Cyrus  H.,   105, 

280 
McCrea,  James,  282 
McCulloch,  J.  S.,  286 
McCurdy,  Richard  A.,  282 

—  Robert  H.,  284 
McCutchen,  Charles  W.,  281 
McEldowney,  H.  C,  186 
McGarrah,  Gates  W.,  224 
Mcintosh,  H.  P.,  250,  268 
Mclntyre,  Archibald,  16 
McKean,  J.  S.,  186 
McKinney,  Frank  C,  309 
McLucas,  W.  S.,  246 
^TcMillan,  Hugh,  280 
ATcMilHn,  Emerson,  280 
Mackay,  Clarence  H.,  282 


Index 


321 


Mactier,  Henry,  16 
Macy,  William  H.,  279 
Magee,  James,  16 
Maitland,  Thomas,  284 
Mallinckrodt,  Edward,  281 
Manhattan  Company,  Bank 
of  the,  29,  30 

—  Trust  Co.,  New  York,  226, 

300 
Manning,  Daniel,  277 
Marshall,  Benjamin,  16 
Marston,  Edgar  L.,  224 

—  Edwin  S.,  109,  236,  295 
Martindale,  Joseph  B.,  286 
Mason,  John  H.,  21,  268 
Mather,  Robert,  282 

—  Wm.  G.,  267 
Maynard,  Edwin  P.,  133 
Mechanics  Bank,  57 

—  Trust  Co.  of  New  Jersey, 

Bayonne,  312 
Mellen,  Charles  S.,  282 
Mellon,  A.  W.,  184 
Menefee,  R.  C,  246 
Mercantile  Trust  &  Deposit 

Co.,  Baltimore,  252,  253, 

306 

—  Trust    Co.,     New    York, 

226,  300 

—  Trust  Co.,  St.  Louis,  210- 

213,  267,  304,  309 

—  Trust  Co.,  San  Francisco, 

230 

Merchants   and    Bankers   Al- 
manac of  1868,  137 

Merchants  Exchange  Co.,  78, 

79 

—  Loan  &  Trust  Co.,  The, 

Chicago,    103-107,    117, 

302 
Meredith,  William,  65 
Merrill,  Edwin  G.,  123 
Mershon,  Leroy  A.,  275 
Metropolitan  Bank  &  Trust 

Co. ,  Los  Angeles,  244, 305 

—  Trust    &    Savings    Bank, 

Chicago,  221,  302 

21 


Metropolitan  Trust  Co.,  New 

York,  166,  167,  302 
Meyer,  George  von  L.,  277 
Michener,  Harry  B.,  286 
Michigan  Trust  Co.,  Grand 

Rapids,  267 
Miller,  C.  S.,  48 

—  Theodore  F.,  133 
Mills,  Andrew,  295 

—  Darius  O.,  285 

—  Ogden,  285 
Mississippi  Valley  Trust  Co., 

St.  Louis,  192-194,  264, 
265,  267,  304,  310 

Missouri-Lincoln  Trust  Co., 
St.  Louis,  304 

Mitchell,  John  J.,  146 

—  Dr.  S.  Weir,  283 
Morgan,  Edwin  D.,  166,  279 

—  J.  Pierpont,  152,  202,  232, 

236,  238,  284 

—  J.  P.  &  Co.,  232 
Morgenthau,  Henry,  278 
Morris,  Calvary,  206 

—  Effingham  B.,  115 

—  Harrison  S.,  48,  311 
Morse,  E.  Rollins,  284 
Mortimer,  Frank  C,  309 
Morton,  Joy,  281 

—  Levi  P.,  180,  197,  277 

—  Paul,  278 

—  Trust  Co.,  New  York,  197, 

300 
Moses,  George  W.,  286 
Mott,  Jordan  L.,  279 
Mumford,  George  S.,  262 
Munsey,  Frank  A.,  283 
Murray,  Lawrence  O.,  278 
Murtha,  Wilham  H.,  258 
Mutual   Life   Insurance   Co., 

The,  80 

N 

Nash,  William  A,  286 
National  Bank  of  Commerce, 
New  York,  231 


322 


Index 


National  Banking  Act,  103 

—  City  Bank,  New  York,  56, 

57 

—  Safety  &  Trust  Co.,  76 
Nettleton,  Charles  H.,  280 
Newberry,  Truman  H.,  278 
Newbold,  George,  65 

New   Brunswick   Trust   Co., 

N.  J.,  178,  304 
Newcomb,  H.  R.,  143 
New     England     Trust     Co., 
..Boston,    143,    144,    305, 

309 

Newton  Trust  Co.,  N.  J., 
178,304 

New  York  Life  Insurance  & 
Trust  Co.,  18-31,  40-42, 
58,  65,  71,  75,  80,  91, 
107,  110-112,  304 

—  Security    &    Trust    Co., 

The,  183 

—  Trust  Co.,  The,  183,  184, 

301 

—  Trust    &    Banking     Co., 

74 
Nicholson,  William  R.,  176 
NicoU,  De  Lanccy,  283 
Norcross,  Otis,  143 
North    American    Trust    & 

Banking    Co.,     69,     74, 

76-78 

—  Trust  Co.,  217 
Northern  Trust  Co.,  Chicago, 

247, 248, 264,  303 
Norton,  D,  Z.,  143 


Oakley,  Thomas  J.,  22 
Oakman,  Walter  G.,  196 
Ohio  Life  Insurance  &  Trust 
Co.,    29,  58-60,  74,  75, 
95-100 
Olcott,  Frederic  P.,  150,  151 
Old  Colony  Trust  Co.,  Bos- 
ton,   189-192,  264,  301, 
312 


Olney,  Richard,  277 
Olyphant,  Robert,  281 
Orr,  Alexander  E.,  197,  281 


Packard,  C.  S.  W.,  112 

—  Edwin,   182,  196 

Page,     Edward     Sydenham, 

311 
Panic,  of  1819,  10 

—  of  1837,  33,  63,64,  81 

—  of   1857,  97,  98,  99,   loi, 

102 

—  of  1873,  146,  147,  148 

of   1893,  201 

—  of  1907,  231-236;  Govern- 

ment Relief  Plan,  234; 
Statement  of  Comp- 
troller of  the  Currency, 

235 
Parish,  Henry,  no 
Paul,  Henry  N.,  112 
Patterson,  C.  Stuart,  286 
Paul  Revere  Trust  Co.,  260 
Payne,  Henry  B.,  140 
Peabody,  Charles  A.,  282 

—  S.  Endicott,  259 

Peace,  Joseph,  7 

Pennsylvania  Co.  for  Insur- 
ances on  Lives  and  Grant- 
ing Annuities,  The  Phila- 
delphia, 2,  4-9,  48-50, 
76,    107,    112,    113,   303, 

311 

People's  Safe  Deposit  & 
Trust  Co.,  Jersey  City, 
256,  306 

—  Trust  Co.,  Brooklyn,  257, 

258,  304 
Perine,  Edward  T.,  203,  309 
Perkins,  George  W.,  224,  284 
Phelps,  Dudley  B.,  255 

—  John  J.,  83 

—  William  Walter,  278 
Philadelphia  Trust  Co.,  144, 

304 


Index 


323 


Phipps,  Henry,  280 
Pierce,  H.  Clay,  285 
Pierson,  Lewis  E.,  286 
Plant,  Morton  F.,  285 
Platten,  John  W.,  202 
Poillon,  William  C,  226,  268 
Political  Events,  Early,  3-5, 

10,  18,  19 
Pope,  Albert  A.,  281 
Porter,  William  H.,  224,  284 
Post,  A.  H.  S.,  252 
Potter,  Edwin  A.,  188,  267 
Pratt,  Charles  IM.,  2 So 
Preston,  Andrew  W.,  286 
Prime,  Nathaniel,  21 
Prince,  F.  M.,  287 
Prosser,  Seward,  225 
Provident  Life  &  Trust  Co., 

Philadelphia,      124-127, 

301 
Pruyn,  Robert  C,  287 
Pullman,    George    AI.,    105, 

281 
Purves,    G.    Colesberry,    286 
Putnam,  William  E.,  150 


Raguet,  Condy,  8 
Randolph,  Edmund  D.,  284 
Ransom,  Frederick  H.,  145 

-  S.  W.,  145 
Ravell,  Charles  H.,  31 1 
Raven,  Anton  A.,  282 
Rea,  Samuel,  282 

Real   Estate   Title   &   Trust 

Co.,  Chicago,  307 
Ream,  Norman  B.,  285 
Red  Bank  Trust  Companv, 

178 
Redmond,  Henry  S.,  284 
Reid,  Daniel  G.,  224,  280 

—  Whitelaw,  278 
Remsen,  Peter,  21 
Reserves,    Trust    Company, 

291-296 
Revell,  Alexander  H.,  281 


Reynolds,    George   M.,    188, 

250, 286 
Rhoades,  John  Harsen,  286 
—  Joshua,  252 
Rhode  Island  Hospital  Trust 

Co.,      Providence,      134, 

135.  164, 302 
Richards,  Benjamin  W.,  51, 

113,115 
Richardson,  Charles,   175 
Riclimond     Trust     &     Safe 

Deposit  Co.,  267 
Ridgway,  Thomas,  115 
Riker,  John  J.,  281 
Riley,  Harrison  B.,  249 
Ripley,  Edward  P.,  282 
Robb,  Russell,  282 
Robberies,  129,  130 
Roberts,  Marshall  O.,  279 
Rochester  Trust  &  Safe  De- 
posit Co.,  253,  306 
Rockefeller,  William,  280 
Rogers,  Henry  H.,  280 
Rogerson,  Charles  E.,  150 
Rolston,  Rosewell  G.,  109 
Roosevelt,  W.  Emlen,  285 
Root,  EHhu,  277 
Ropes,  Ripley,  133 
Rue,  Levi  S.,  286 
Russel,  William  W.,  16 
Ryan,  Thomas  F.,  180,  285 


Sabin,  Charles  H.,  196 
Safe   Deposit  &  Trust    Co., 
Baltimore,  228 

—  California,  230 
Sage,  Russell,  122,  284 
St.  Louis  Trust  Co.,  265 
Saltus,  Francis,  16 
Sands,  B.  Aymar,  283 

—  Oliver  J.,  287 

San  Francisco  Fire  of    1906, 

229, 230 
Sartori,  J.  F.,  186 
Satterlee,  Herbert  L.,  238 


324 


Index 


Savings  &  Loan  Society,  San 
Francisco,  243 

—  Union  Bank  &  Trust  Co., 

San  Francisco,  243,  244, 

303 
Scarborough,  W.  W.,  loi 
Schaflner,    Ivlargarct    Anna, 

309 
Scheerer,  Wm.,  287 
Schcfer,  Carl,  281 
Schell,  Christian,  16 
Schieren,  Charles  A.,  279 
SchifF,  Jacob  H.,  180,  284 

—  Mortimer  L.,  284 
Schlatter,  William,  8 
Schley,  Grant  B.,  284 
Schmidlapp,  J.  G.,  251 
Schmidt,  Edward  A.,  286 
Schwab,  Charles  M.,  280 
Scribner,  Charles,  279 
Security  Title  &  Trust  Co., 

Chicago,  265 

—  Trust    &   Savings    Bank, 

Los    Angeles,    186-188, 
302 

—  Trust    Co.    of   Rochester, 

254.  307 
Seligman,  Isaac  N.,  284 
Sellers,  Frank  H.,  265 
Sergeant,  John,  48 
Seymour,  Henry,  46 
Sharp,  Samuel  S.,  286 
Shaughnessy,  Sir  Thomas  G., 

282 
Shaw,  G.  B.,  188 

—  Leslie  M.,  277 
Sheldon,    Edward    W.,    117, 

236,  295 
Sherman,  James  S.,  277 
Shipley,  Samuel  R.,  126 
Shoemaker,  Jacob,  8 
Shonts,  Theodore  P.,  282 
Shortridge,  N.  Parker,  282 
Sigel,  Franz,  278 
Simmons,  E.  C,  281 

—  J.  Edward,  286 
Skelding,  Francis  H.,  224 


Sloan,  Samuel,  281 
Sloaiie,  William  D.,  281 
Smith,  Charles  Emory,  272 

—  Byron  L.,  248 

—  George  T.,  287 

—  J.  Moreau,  254 

—  Orson,  105 

—  Solomon  A.,  105,  248 

—  V.  Moreau,  254 
Smyth,  Lindley,  112 
Snow,  Elbridge  G.,  282 
Snyder,  Valentine  P.,  285 
Southard,  George  H.,  1S2,  264 
Southern    Life    Insurance   & 

Trust  Co.,  St.  Augustine, 
60,  61,  71 

—  Trust    Co.,    Los   Angeles, 

302 
Spaulding,  Henry  F.,  150 
Specie  Payments  Suspended, 

10,  63,  65,  102,  237 
Spencer,  Samuel,  282 
Sperry,  Jacob,  7 
Speycr,  James,  284 
Spreckels,  Claus,  280 
Standard    Trust    Co.,    New 

York,  300 
State  Banks,  Growth  of,  79 

—  Street  Trust  Co.,  Boston, 

260-261,  305,  312 

—  Trust  Co.,  New  York,  267 
Steele,  Charles,  284 

Stein wav,  William,  279 
Sterhng,"  John  W.,  283 
Stern,  Louis,  281 
Sterrett,  J.  E.,  308 
Stetson,  C.,  98 
Stevenson,  Adlai  E.,  277 

—  John,  Jr.,  280 

Stewart,  John  A.,  84,  86,  116 

—  Lispenard,  283 
Stickney,  George  E.,  189 
Stillman,  James,  180,  285 
Stilwell,  Arthur  E.,  282 
Stites,  John,  265 
Stockton,  Philip,  191 
Stone,  Frederick  M.,  149 


Index 


325 


Storm,  Garrit,  22 
Stotesbury,  Ldward  T.,  204 
Straus,  Isidor,  281 
—  Jesse  I.,  281 
Strong,  Benjamin,  Jr.,  225 
Strong,  William  L.,  279 
Sullivan,  James  F.,  2S6 
Sumner,     William     Graham, 

308 
Superintendent     of     Banks, 
Oirice  Established  at  Al- 
bany, 75 
Suspensions     and     Failures, 

288-290 
Swayne,  Wager,  278 
Swinney,  Edward  F.,  224 


Taft,  Wm.  H.,  274 
Talcott,  James,  284 
Tallmadge,  James,  16 
Tatnall,  Henry,  2S2 
Taylor,  Moses,  109,  279 

—  Roland  L.,  144 

Testamentary  Trusts,  Not- 
able, 106,  132,  133,  142, 
194,  212,  258 

Thalmann,  Ernst,  284 
Thayer,  Eugene  V.  R.,  287 
Thomas,  Douglas  H.,  287 

—  Eben  B.,  282 

—  Samuel,  282 

—  Seth  E.,  280 
Thompson,  David,  no 

—  John,  99 

—  John  F.,  224 
-—  Samuel,  21 
Tierney,  Myles,  256 
Tiffany,  Charles  L.,  279 
Tilden,  Samuel  J.,  279 

—  William,  A.,  286 
Tileston,  Thomas,  109,  284 
Tilford,  Frank,  281 
Tilley,  John  D.,  265 

Title  Guarantee  &  Trust  Co., 


New  York,  169-172,  265, 

292,  302 
Title  Insurance  &  Trust  Co., 

Philadelphia,  267 
Tompkins,  C,  265 
Townsend,  Edward  M.,  286 

—  Isaiah,  21 

—  John  R.,  no 

—  Thomas  S.,  16 
Tracy,  Benjamin  F.,  277 

—  Frederick  A.,  16 
Tradesmen's  Bank,  65 
Trenhokn,  William  L.,  278 
Trumbull,  Frank,  2S2 
Trust     and     Banking     Co., 

Troy,  70 

Trust  &  Deposit  Co.  of  Onon- 
daga, Syracuse,  255,  307 

Trust  Companies,  Chart  of, 
1907,  215 

—  Earliest  Reports,  28 

—  Early  Decisions  on,  84,  85 

—  First  Reliable  Statistics  of, 

153,  161-164 

—  Reports  of  Federal  Comp- 

troller, 159,  160,  165 

—  Reports    on,   Ordered    by 

State  Senate,  90 

—  State  Superintendent's  Re- 

port (1S74),  158,  161 

—  State  Supervision  of,  153- 

158 

—  StabiUty  of  (1893),  201 

—  Statistics     (since      1875), 

297-299 

—  Suspensions  of,  147 
Trust  Companies,  Forms  for, 

273>  309 
Trust      Companies      of     the 

United  States,  203,  242, 

298,  30S 
Trust  Companies — Magazine, 

216,  22S 
Trust  Company  Committee, 

New  York,  235-237 

—  Figures,  Bankers  Encyclo- 

pedia (1896),  200 


326 


Index 


Trust  Company,  Functions, 
118-121,  208 

—  Plan    in  Other  Countries, 

240,  241 

—  Section,    263-275;    Presi- 

dents   and    Meeting 
Places,  267,  268 

—  Proceedings,  271 

—  Suspensions,  235 

—  of  America,  217,  232,  267, 

301 

—  of  New  Jersey,  Hoboken, 

256,  306 

—  of  the  Republic,  New  York, 

290 
Tuckerman,  Charles  S.,  189 
TurnbuU,  Arthur,  202,  284 

—  William,  279 
Tuttle,  Lucius,  282 
Twohy,  D.  N.,  287 
Tyrell,  John,  105 

U 

Union  Bank  &  Trust  Co.,  of 
New  London,  Conn.,  2 

—  County  Trust  Co.,  Eliza- 

beth, 178,  304 

—  Savings    Bank    &    Trust 

Co.,  Cincinnati,  251,  306 
Union  Trust  Co.,  Boston,  291 

—  Chicago,  144,  304 

—  Indianapolis,  265 

—  New  York,  122-124,  247, 

301 

—  Pittsburgh,  184-186,  301 

—  Providence,  235 

—  St.  Louis,  265 

—  San   Francisco,   204,   205, 

.  305 

United  States,  Bank  of  the,  25, 
28,  57,  64; Second,  33,  61 

—  Bank  of  Pennsylvania,  61- 

63 

—  Mortgage    &    Trust    Co., 

New  York,  202-204,  264, 
301,  308 


United    States     Trust     and 

Banking  Co.,  69 
—  Trust  Co.,  80,  82-92,  107, 
116,  117,  302,311 


Vail,  Theodore  N.,  282 
Valentine,  Patrick  A.,  281 
Vanderbilt,  Alfred  G.,  285 

—  Commodore       Cornelius, 

109,  123,  281 

—  Cornelius,  285 

—  Frederick,  W.,  197 

—  William  H.,  123,  281 
Vanderlip,  Frank  A.,  285 
Van  Home,  Sir  William  C, 

282 
Van  Norden  Trust  Co.,  292 
Van  Rensselaer,  Stephen,  21 
Van  Tuyl,  George  C,  Jr.,  168 
Verplanck,  Gulian  C,  21 
Viele,  John  L.,  16 
Victor,  Thomas  F.,  281 
Vilas,  William  F.,  277 
Villard,  Oswald  G.,  283 
Vogel,  F.  B.,  312 

—  Fred,  Jr.,  287 

W 

Wachovia  Loan  &  Trust  Co., 
Winston-Salem,  N.  C, 
268 

Wade,  Festus  J.,  210,  267 

—  Jeptha  H.,  140,  143 
Wadsworth,   James   S.,    123, 

278 
Wagner,  Edwin  L.,  286 
Wales,  Salem  H.,  283 
"Wall  Street  Chorus,  The," 

72 
Wallace,  James  N.,  151,  236 
Walmsley,  R.  M.,  209 
Walsh,  Julius  S.,  193 
Wanamaker,  John,  277 

—  Thomas  B.,  281 


Index 


327 


Warburg,  Paul  M.,  284 
Ward,  A.  Montgomery,  281 
Warder,  Jeremiah,  Jr.,  7 
Waring,  Orville  T.,  280 
Washburn,  W.  J.,  187 
Washington  Trust  Co.,  Wes- 
terly, R.  I.,  2 
Waterbury,  John  I.,  226,  236 
Watson,  Clarence  W.,  278 

—  James  S.,  254 

—  Robert  C,  254 
Weld,  C.  Minot,  286 
Wells,  Herbert  J.,  136 
Welsch,  John,  8 
Westinghouse,    George,    Jr., 

280 
Weyerhauser,    Frederick   E., 

280 
Wheaton,  Henry,  16 
Whitaker,  Edwards,  287 
White,  David,  16 

—  Horace,  279 
Whitelaw,  John  P.,  250 
Whitney,  David  R.,  143 

—  Harry  Payne,  285 

—  Stephen,  22 

—  William  C,  277 
Widener,  Peter  A.  B.,  285 
Wiggin,  Albert  H.,  224 
Wigglesworth,  George,  143 
Williams,  Clark,  267 

—  George,  G.,  286 

—  John  Skelton,  267,  278 

—  Micajah  T.,  58 

—  Moses,  261 


Williamsburg  Trust  Co.,  234 
Williamson,  Dow  D.,  109 
Willis,  H.  Parker,  273 
Windsor    Trust     Co.,     New 

York,  220,  303 
Wing,  Asa  S.,  127 
Winslow,  Sidney  W.,  281 
Winsor,  Robert,  224 
Winthrop,  Henry  Rogers,  284 
Wisconsin  Trust  &  Security 

Co.,  Milwaukee,  268 
Woerheide,  A.  A.  B.,  265 
Wood,  Arthur  King,  182 
Woodbury,  Levi,  53 
Woodford,  Stewart  L.,  278 
Woods,  Dr.  W.  S.,  246 
Woodward,  James  T.,  286 
Woolverton,  Samuel,  224 
Woolworth,  Frank  W.,  281 
Worthington,  George,  140 
Wright,  Clifford  B.,  251 
Wrigley,  William,  Jr.,  280 


Yoakum,  Benjamin  F.,  282 
Yorke,  Samuel,  7 
Young,  Edward  F.  C,  224 
—  George  W.,  202,  264 


Ziegler,  William,  281 


ONIVERSllY  OF  SOUTHERN  CALIFORNIA  USm^' 


A  History  of  Modem 
Banks  of  Issue 

By 

Charles  A.  Conant 

Author  of  "  Wall  Street  and  the  Country,"  etc 

8°.     5th  Edition^  Revised  and  Enlarged.     $3.50 

"  No  better  volume  can  be  recommended 
to  the  general  reader  who  wishes  to  famiharize 
himself  not  only  with  the  theory  of  banking, 
but  with  the  history  and  actual  experience  of 
this  great  agency  of  industrial  progress." — 
Chicago  Eve,  Post. 

"  We  can  only  express  our  hearty  appreci- 
ation of  the  book  as  a  whole.  It  is  extremely 
interesting.  It  cannot  but  be  useful,  and  to 
us  it  is  very  cheering.  Mr.  Conant's  book, 
from  beginning  to  end,  is  a  proof  that  sound 
currency  is  evolved  necessarily  from  the 
progress  of  an  'industrial  and  commercial 
people.'  "— iV.  Y.  Times, 

G.  P.  Putnam's  Sons 

New  York  London 


Capital  To=Day 

A  Study  of  Recent  Economic  Development 

By  Herman  Cahn 

12°.     $1.50 

The  following  study  has  been  written  with 
special  reference  to  the  present  economic 
situation  in  the  United  States,  the  essential 
features  of  which  have  been  developed  since 
the  Civil  War.  But  as  the  law  underlying 
the  capitalist  mode  of  production  and  its 
tendencies  are  the  same  everywhere,  such 
special  reference  to  one  country  partakes  of 
the  character  of  an  illustration  of  conditions 
obtaining  or  shaping  themselves  to-day  in  all 
advanced  industrial  countries. 

The  most  momentous  developments  during 
this  period  are  the  centralization  of  control 
of  capital  and  the  modification  of  the  money 
system.  The  latter  is  by  far  the  more  por- 
tentous. Yet  it  is  the  former  which  occupies 
public  attention,  while  silence  reigns  concern- 
ing the  menacing  money  question. 

Partial  List  of  Contents 
Economics  a  Science — Marxian  Theory  of 
Value  Briefly  Stated — Functions  of  Money — 
The  Handicaps  of  the  Money  System — 
Money  Tokens — Money  of  Account — Totality 
of  Money  System  in  U.  S. — The  Cycle  of  In- 
dustrial Capital — The  Mystery  of  Capitalism 
— Fictitious  Capital — The  Concentration  of 
Industrial  Capital — The  Concentration  of 
Money  Capital — Unified  Capital. 

G.  P.  Putnam's  Sons 

New  York  London 


A  Brief  History 
of  Panics 

And  their  Periodical  Occurrence  in  the 
United  States 

By  Clement  Juglar 

Translated,  Edited,  and  with  an  Introduction 

By  DeCourcy  W.  Thom 

12°.    $1.00 

This  third  edition  of  a  decidedly  im- 
portant work  has  received  a  valuable 
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Stock  Exchange  and  of  the  N.  Y.  Con- 
solidated Exchange,  which  brings  the 
book  from  1889  down  to  date. 

G.  P.  Putnam's  Sons 

New  York  London 


The 

Theory  and  History 

of  Banking 

By  Charles  F.  Dunbar 

Revised,  Enlarged,  and   Brought  to   Date  by 

0.  M.  Sprague 

This  important  volume  by  the  late 
Professor  of  Political  Economy  in  Har- 
vard University  was  first  published  in 
1 89 1.  At  the  time  of  the  author's  death, 
in  1900,  he  was  engaged  in  revising 
and  enlarging  the  work.  The  comple- 
tion was  intrusted  to  Mr.  Sprague,  and 
a  second  edition  appeared  in  1901. 
Over  25,000  copies  have  been  sold. 
Mr.  Sprague  has  revised  and  brought 
this  third  edition  down  to  date.    ^. 

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